ARRA Increases Qualified Transportation Benefits Limit

Among the many provisions of the American Recovery and Reinvestment Act (ARRA) of 2009, the law contains an increase in the monthly amounts that may be excluded from gross income for transit passes, vanpool privileges, and the commuter highway vehicle exclusion. Effective March 1, 2009, the cap on pre-tax transit reimbursement will be increased to $230 (from $120) per month to equal to the parking reimbursement limit.

This increase provision expires January 1, 2011, which means the transit limit will revert to its current level unless Congress or the Treasury Department takes additional action before then.

Authoritative information on this change can be found on page 219 of the final AARA legislation at:
http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=111_cong_bills&docid=f:h1enr.pdf.