Pre-tax Transit Benefits

FOR IMMEDIATE RELEASE:
December 13, 2015

How Much Will You Save on Transit in 2016?

Council Member Garodnick, Riders Alliance, and Straphangers Campaign Help Commuters Calculate Savings

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On Sunday morning, Council Member Dan Garodnick, Riders Alliance, Straphangers Campaign, and the Department of Consumer Affairs set up shop in the Union Square subway station with a giant calculator and an oversized tax chart, which they used to help riders estimate how much they could save on transit as a result of the NYC Commuter Benefits Law.


After calculating their savings, riders wrote them down and took a photo to share on social media, using the hashtag #MyTransitBenefits. Additionally, Riders Alliance debuted the “Commuter Benefits Savings Calculator” for riders to estimate their savings. It’s available on their website at www.ridersny.org/calculator.


Under the new law, businesses with 20 or more employees will be required to offer their employees the opportunity to use pre-tax dollars toward transit. When the law goes into effect on January 1, 450,000 more New Yorkers will be eligible for the program, which saves the average rider up to $443 a year on monthly MetroCards. For each of their employees who signs up, employers will see their tax liability reduced, which means businesses save money through this program, too.


“We are putting money back into the pockets of 450,000 more New Yorkers,” said Council Member Dan Garodnick. “By making transit more affordable, this will have a tremendous impact on commuters’ bottom line.”


At the event, volunteers and staff members from the Riders Alliance, Straphangers Campaign, and the Department of Consumer Affairs were out in force, talking to commuters about the program, helping them calculate what their savings would be, and giving out tips on talking to employers about enrolling in the program.


Rebecca Bailin, campaign manager at the Riders Alliance, said,  “This new law will mean serious savings for hundreds of thousands of transit riders. But the law will only work if riders know about it. That’s why we’re talking to riders and helping folks estimate how much they can save with pre-tax transit benefits.”


Zachary Arcidiacono, a Riders Alliance member from Queens, said, “I’m excited to be out here helping riders calculate their transit benefits savings. It’s not as complicated as it looks. Everyone should know that the new law puts real money back in the pockets of riders for the subway and bus service they’re already using.”


Lauren Houston, a Riders Alliance member, said, “I used the transit benefits calculator and found out that I save hundreds of dollars a year. Feels like a holiday bonus! With this new law, my benefits are now guaranteed and my friends who work for smaller companies will now have access to cost savings that will take the stress off the fare.This makes the regular MTA fare increases less of a burden.”


“In the new year, hundreds of thousands of New York City workers will have access to cheaper transit if their employer takes advantage of NYC’s new Commuter Benefits Law. It’s a win-win for riders and employers,” said Cate Contino Cowit, coordinator for the NYPIRG Straphangers Campaign.


“Commuter benefits are a win-win for both employers and employees,” said Department of Consumer Affairs Commissioner Julie Menin. “We continue to work with businesses across the five boroughs to make sure they know how to comply with this law before it goes into effect onJanuary 1, 2016. We’re proud to be joining Council Member Garodnick, the Riders Alliance, and the Straphangers Campaign, whose joint efforts are the reason this important benefit is now available to hundreds of thousands of New Yorkers, to educate New Yorkers about how much they can save when they sign up for commuter benefits.”




 

FOR IMMEDIATE RELEASE
July 27 2014

In Day of Action, Riders Alliance Asks Subway Riders: What Would You Do With $443 Off Your Metrocard?

Riders Alliance Grassroots Activists Hit Subway Platforms to Build Support For a Bill That Could Make 605,000 Additional New Yorkers Eligible for a Metrocard Tax Break

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BROOKLYN, NEW YORK—In a grassroots day of action this Sunday, members of the Riders Alliance spoke with subway riders in the Atlantic Ave—Barclays Center station, the busiest station in Brooklyn, to build support for City Council legislation that could save more than a half million New Yorkers as much as $443 off their Metrocards every year.


Riders Alliance activists asked their fellow subway riders: “What would you do with $443?”  Riders’ responses to the question were compiled by photo in a “pop-up photobooth” so their answers can be shared with Mayor de Blasio and City Council Speaker Mark-Viverito, who will control the fate of the bill.  Riders also signed petitions to support the bill.


The legislation, introduced by Council Member Dan Garodnick, could make an additional 605,000 New Yorkers eligible for a commuter tax break, saving each of them hundreds of dollars each year.  It would require companies that employ 20 or more people to offer pre-tax transit benefits to their employees in New York—a tax break that would save money for both transit riders and their employers.


Tolani Adeboye, a member of the Riders Alliance, said, “I save hundreds of dollars a year on transit benefits through my tax break. It doesn’t make sense to me that only we lucky ones get to take advantage. My transit benefits mean enough to me that I’m motivated to spread the word to my fellow New Yorkers and collect signatures to urge the City Council and the Mayor to expand access. This is one of the easiest ways to give tax relief to working people in this city.”


Andrew Carr, a member of the Riders Alliance, said, “I’m getting the opportunity to save over $400 every year! In a city where it costs so much just to breath, I’m glad to save the extra money for myself.”


David Weinberger, a member of the Riders Alliance, said,” The pre-tax transit benefit is a game-changer for commuters who are strapped for cash. I want everyone to know about this important legislation. Think of all the things you can do with $443! Like ride the Cyclone 50 times, pay off credit card debt, or eat dinner out in Manhattan.”


Alexis Saba, a member of the Riders Alliance, said, “People who already are able to take advantage of pre-tax transit benefits know that the benefits are a no-brainer. But for people who don’t know how they work or how they are a win for employees and employers alike, it is important to spread the word. That’s what the Riders Alliance is for! Everyone could use an extra $443 a year.”


Federal law allows transit riders to save money by paying for up to $130 in subway and bus fares every month from pre-tax earnings, just like people pay for health insurance or retirement contributions.  A New Yorker earning the city’s median income could save $443 every year by taking advantage of this tax break.  But workers aren’t allowed to take the tax break if their employer doesn’t offer it.  Council Member Garodnick’s legislation would expand access to these savings by requiring employers of 20 or more people to offer the benefit in New York City.  The Riders Alliance is pushing for this bill to be passed before the next expected fare hike goes into effect in early 2015.


 


FACTS ABOUT TRANSIT BENEFITS & COUNCIL MEMBER GARODNICK’S BILL


 


The Riders Alliance report released in April estimated that:



  • Approximately 1 million people who live and work in NYC do not currently have access to the transit tax break

  • Passing Council Member Garodnick’s bill would allow 605,000 new people to take advantage of the transit tax break

  • An average New Yorker who makes the median wage could save $443 every year with the transit tax break

  • Businesses who sign up save money too: for every employee at the median wage who signs up, businesses can save $103 every year in taxes

  • If the bill is passed, New Yorkers will keep more than $85 million each year in the local economy instead of spending the money on taxes



  • How Transit Benefits Work:

    • Federal tax law lets transit riders put aside $130 per month before taxes to pay for transit, just like people set aside pre-tax money for health care and retirement

    • According to tax law, it has to be a benefit offered by the employer to qualify

    • People who have the tax break get their transit fare through their employer: the most popular ways to do it are to receive a pre-paid Metrocard or a debit card that can only be used at MTA vending machines

    • Employers can either manage the benefit in-house or sign up with a company that does it for them; employers of 20 or more employees generally save money when they sign up for the program



  • How Employees Save Money With Pre-Tax Transit Benefits:

    • Employees’ taxable income is reduced by however much money they set aside for transit benefits (up to $130 each month)

    • For example, if someone makes $50,000 annually, but buys a monthly Metrocard and spends $1,344 each year on transit, she would only report $48,656 in taxable income to the IRS, and pay taxes only on that lower amount



  • How Businesses Save Money With Pre-Tax Transit Benefits:

    • Employers only pay payroll taxes on their employees’ taxable income

    • That means that if an employee sets aside $1,344 annually to buy a monthly Metrocard, the employer would not have to pay Social Security, Medicare and other payroll taxes on that money

    • Even if an employer contracts with an outside company to manage the benefit, the employer usually saves more in tax money than it spends on administering the benefit



  • Council Member Garodnick’s legislation would require firms that have 20 or more employees to offer the transit benefit option to employees in New York City.




 

FOR IMMEDIATE RELEASE
April 27, 2014

Report: New City Council Legislation Could Help 605,000 New Yorkers Save Money on Bus and Subway Fares

Council Member Dan Garodnick Introduces Affordable Transit Act, Would Require Large New York Employers to Offer Pre-Tax Transit Benefits to Workers

Legislation Would Save Money for Riders and Businesses

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New York, NY—City Council Member Dan Garodnick announced legislation today that will help hundreds of thousands of transit riders save money on subway and bus fares.  The Riders Alliance released a report (attached) showing that the legislation would make 605,000 New Yorkers eligible for tax breaks that could save the average New Yorker $443 every year on transit costs.


The Riders Alliance, as well as transit advocates including the Straphangers Campaign, Tri-State Transportation Campaign, and TransitCenter, urged the City Council to quickly take up and pass Council Member Garodnick’s proposed legislation, to make public transit cheaper for hundreds of thousands of New Yorkers before the next expected fare hike goes into effect in early 2015.


Council Member Dan Garodnick said, “Allowing people to put aside pre-tax income for mass transit benefits is good public policy.  We want to make is as easy as possible for people toparticipate.”


John Raskin, Executive Director of the Riders Alliance, said, “This bill could save money for literally hundreds of thousands of transit riders.  Fares are supposed to go up again next year, and this is something the City can do to make transit a little more affordable for people who ride it.  Transit benefits are a win-win for employers and workers, and they encourage people to use public transportation.”


Gene Russianoff, staff attorney for the NYPIRG Straphangers Campaign, said, “New York City is notorious for its cost of living, from high-priced milk to costly haircuts to racking up more than $1300 a year for many daily subway and bus riders.  But there’s good news for New Yorkers on a tight budget: A federal program cuts hundreds of dollars off yearly transit costs. All you need is get your boss to enroll you in this savings program.  Council Member Dan Garodnick’s legislation encourages many employers to do just that.”


Federal law allows transit riders to save money by paying for up to $130 in subway and bus fares every month from pre-tax earnings, just like people pay for health insurance or retirement contributions.  A New Yorker earning the city’s median income could save $443 every year by taking advantage of this tax break.  But workers aren’t allowed to take the tax break if their employer doesn’t offer it.  Council Member Garodnick’s legislation would expand access to these savings by requiring employers of 20 or more people to offer the benefit in New York City.


 


FACTS ABOUT TRANSIT BENEFITS & COUNCIL MEMBER GARODNICK’S BILL


The Riders Alliance report released today estimated that:


         Approximately 1 million people who live and work in NYC do not currently have access to the transit tax break


         Passing Council Member Garodnick’s bill would allow 605,000 new people to take advantage of the transit tax break


         An average New Yorker who makes the median wage could save $443 every year with the transit tax break


         Businesses who sign up save money too: for every employee at the median wage who signs up, businesses can save $103 every year in taxes


         If the bill is passed, New Yorkers will keep more than $85 million each year in the local economy instead of spending the money on taxes


 


How Transit Benefits Work:


 


         Federal tax law lets transit riders put aside $130 per month before taxes to pay for transit, just like people set aside pre-tax money for health care and retirement


         According to tax law, it has to be a benefit offered by the employer to qualify


         People who have the tax break get their transit fare through their employer: the most popular ways to do it are to get a pre-paid Metrocard or a debit card that can only be used at MTA vending machines


         Employers can either manage it themselves or sign up with a company that does it for them; employers of 20 or more employees generally save money when they sign up for the program


 


How Employees Save Money With Pre-Tax Transit Benefits:


 


         Employees’ taxable income is reduced by however much money they set aside for transit benefits.


         For example, if someone makes $50,000 annually, but buys a monthly Metrocard and spends $1,344 each year on transit, she would only report $48,666 in taxable income to the IRS, and pay taxes only on that lower amount


 


How Businesses Save Money With Pre-Tax Transit Benefits:


 


         Employers only pay payroll taxes on their employees’ taxable income


         That means that if an employee sets aside $1,344 annually to buy a monthly Metrocard, the employer would not have to pay Social Security, Medicare and other payroll taxes on that money


         Even if an employer contracts with an outside company to manage the benefit, the employer usually saves more in tax money than they spend on administering the benefit


 


Council Member Garodnick’s legislation would require firms that have 20 or more employees to offer the transit benefit option to employees in New York City.


 


SUPPORT FROM MEMBERS OF THE CITY COUNCIL


 


Council Member Ydanis Rodriguez, Chair of the Transportation Committee, said, “One of the best ways we can deliver for the residents of New York City is providing tax-free transit benefits, shaving off hundreds of dollars in New Yorkers’ annual budgets. If we expand access to this great program that many New Yorkers already enjoy, it will mean more money in people’s pockets to be spent on food, housing, clothing and other vital needs. This policy is a game changer and I fully support Council Member Garodnick’s initiative. It’s time to make it happen.”


Council Member Steve Levin said, “New Yorkers depend on public transportation each and every day. It is how we get to work, how we see our friends and family, and how we access all that New York City has to offer. Enrolling in pre-tax transit benefits programs saves employees and employers money and encourages the use of public transportation. Expanding this benefit is smart policy and I thank Council Member Garodnick for introducing this legislation.”


Council Member Vincent Gentile said, “At a time when so many hard working New Yorkers are struggling to make ends meet, we must be doing more to help deal with the staggering cost of living in our City. Allowing more New Yorkers to enroll in a pre-tax transit benefits program, which allows employees to set aside money from their paychecks before paying taxes on it, would save working families hundreds of dollars a year, at little to no cost for employers. I thank my colleague Councilman Dan Garodnick for introducing this legislation, and the Riders Alliance for their tireless advocacy on behalf of everyone who uses public transit.”


Council Member Helen Rosenthal said, “The cost of commuting to work adds up fast. By expanding pre-tax transit benefits to all working New Yorkers, we can encourage more people to use public transportation, reduce congestion, and save people hundreds of dollars a year.”


 


SUPPORT FROM BUSINESSES, TRANSIT RIDERS AND ADVOCATES


 


Jenniffer Brown, the firm administrator at Weiner, Millo, Morgan & Bonanno, LLC, which has 28 employees, says, “We provide transit benefits to our employees because it enhances our benefit package and saves us and our employees money. Administration of the benefit is quick and easy.”


Nancy Ashbridge, human resource administrator at Gannon Vitolo Contracting, LLC, which has 27 employees, says, “We are a small General Contracting firm with 26 employees.  12 of our employees participate in the TransitChek benefits.  Everyone is very happy with TransitChek as it saves money for the employees and the company.  It takes a little to set up but once it’s going it’s a piece of cake.   I would recommend all companies offer this to their employees.”


Patty Hutton, a member of the Riders Alliance who commutes to work in Manhattan from Bay Ridge, says, “I’ve been using transit benefits for almost a decade. It saves me money and it’s flexible. I can adjust the amount I put on my card to anticipate changes in use such as vacation. Anything that can help me save money on necessary monthly expenses is helpful these days. I am fortunate to have an employer that provides pre-tax transit benefits.”


Veronica Vanterpool, Executive Director of the Tri-State Transportation Campaign, said, “If employers want to save money, they should enroll in a transit tax benefit program.  Not only does it reduce company payroll taxes, it keeps more money in the pockets of transit riding employees. It’s advantageous for all.”