Millions of transit riders and tens of thousands of businesses will see their taxes go up in 2012 because Congress was unable to pass legislation to maintain parity between the transit and parking benefits. At the end of 2011, the transit and parking benefits were set at a monthly cap of $230 per month. However, beginning January 1st, 2012, transit riders saw their benefit cut nearly in half (down to $125/month) while individuals who park saw their benefits increase to $240 a month. This means that Americans with the longest and most expensive commutes watched their tax liabilities increase up to $500 for 2012. At the same time, small businesses and corporations that offer these very popular pre-tax transit benefit programs to their employees will see their tax liability increase by thousands of dollars.

As an example, a schoolteacher living in Bucks County, Pennsylvania takes the West Trenton line from Yardley into Center City Philadelphia. His monthly trail pass is $191 a month. His annual salary is just above $54,000. The transit benefit helps him save almost a $100 a month in Federal and state taxes. Without parity, the taxes he pays on salary used for commuting will increase well over $400 in 2012.

"Failing to enact legislation to maintain parity essentially supports a policy which taxes transit riders and provides a financial incentive for people to leave transit and drive to work, further congesting already busy roads," said Gerard Bridi, President and CEO of Edenred USA, the leading full service provider of commuter benefits.

Washington, DC's Metro transit system recently indicated that it expects peak commuting ridership to drop 2.8% because of this Congressional inaction. Most of its commuters live in the Maryland and Virginia suburbs and thus have the longest and most expensive commutes. This could result in more highway congestion as well as loss of revenue to Metro.

"Not only does this inaction have an impact on individuals, but also the employers who offer it. We estimate that last year, employers that provided the transit benefit saved nearly $300 million in payroll taxes. This money is used to retain as well as hire workers. Failure to maintain parity hurts those employers who offer the transit benefit and in essence punishes them with increased payroll taxes," Bridi added.

Finally, failing to establish parity may hurt rural commuters the most. The transit benefit is not only used by those who ride commuter rail or buses, but also by thousands of vanpool users. In many parts of the country, vanpooling is the only mode of public transportation. The costs of vanpooling generally exceed $125/month and a reduction in the transit benefit hurts those individuals the most.

"I want to thank Congressman McGovern, Senator Schumer and all those who worked to preserve parity at the end of last year. When Congress returns to work on January 23, I am hopeful that they will do what is necessary to correct this situation and will extend parity," concluded Bridi.

About Edenred USA

Edenred USA is a leader in innovative employee benefits solutions and premier provider of national commuter benefit programs: Commuter Check, a nationwide commuter benefits program provider; and WiredCommute, a private label program for third party administrators. Its mission is to make tax-free commuter benefits a staple in employee benefits packages throughout the American workplace - while helping protect the environment.

About Edenred Group

Edenred, which invented the Ticket Restaurant® meal voucher and is the world leader in prepaid corporate services, designs and delivers solutions that make employees' lives easier and improve the efficiency of organizations.

By ensuring that allocated funds are used specifically as intended, these solutions enable companies to more effectively manage their:

  • Employee benefits (Ticket Restaurant®, Ticket Alimentación, Ticket CESU, Childcare Vouchers, Commuter Check, WiredCommute etc.)
  • Expense management process (Ticket Car, Ticket Cleanway, etc.)
  • Incentive and rewards programs (Ticket Compliments, Ticket Kadéos, etc.)

The Group also supports public institutions in managing their social programs.

Listed on the NYSE Euronext Paris stock exchange, Edenred operates in 40 countries, with 6,000 employees, nearly 530,000 companies and public sector customers, 1.2 million affiliated merchants and 34.5 million beneficiaries. In 2010, total issue volume amounted to ?13.9 billion, of which 55% was generated in emerging markets.

Ticket Restaurant® and all other tradenames of Edenred products and services are registered trademarks of Edenred SA.

Edenred
Sara Gyllstrom, 857-228-1423
sara.gyllstrom@edenredusa.com