SmartBenefits to be Cut for 2011?

by Prince Of Petworth November 18, 2010 at 11:00 am 26 Comments

Photo by PoPville flickr user Mr. T in DC

From Ron Holzer, office of public relations, WMATA:

Starting January 1, 2010, SmartBenefits commuters could lose up to $1,300 per year in transit benefits because of two changes being made by the Federal government:

· The maximum monthly transit benefit allowed by federal law will decrease from $230 to $120; and

· Commuters will no longer be able to use their transit and parking benefits interchangeably as Metro begins to phase in an Internal Revenue Service (IRS) mandate that requires a separation of the parking and transit accounts for commuters.

In the National Capital region, 285,000 employees currently receive transit benefits. And at least 90,000 of these Metro commuters currently receive more than $120 per month.

On top of that, there is an IRS mandate to separate parking and transit benefits. Metro is currently taking steps to comply with an IRS mandate that requires transit and parking benefits be separated into two different accounts. Riders will be prevented from using transit benefits from parking (and vice versa).

More than 220,000 Metro customers will ultimately be impacted by this change, which will be phased through the spring as Metro makes needed programming change to its faregates and fareboxes in order to comply with the IRS regulations.

Obviously I think he means, Jan. 1, 2011. Do you guys receive monthly benefits over $120 a month?

  • Jessica

    Sure do – I should be getting $145 (I think) per month, so while this is only a minor setback, it’s still annoying. I’ve run out of benefits a few times this year due to the phased Metro increases which didn’t line up with DOD benefit distro.
    However, I do realize that I’m lucky to recieve the assistance at all. Not getting it stinks.

  • J.H.

    I had been recieving more than $120, but I knew it wouldn’t last. The only reason people could get up to $230 was because of the Stimulus plan. It was never intended to be permanent. People should still be thankful that they get a $1,440 subsidy/year.

    • joker


    • I do hope all you high paid Federal Government workers have been paying your taxes on that benefit too.

      I am in private industry and we get a 1099 for employee gifts over $100.

      Of course I know many people who just sold their benefits before the smart cards.

      • Kev29

        For most people it’s not a “free” benefit – just a way of paying for Metro pre-tax. So are you saying that we should be taxed on our tax break?

        • joker

          I don’t know about “most”, but fed gov employees get it as a compeltely free benefit. It isn’t pretax money set aside, rather a $1,440 dollar a year “bonus”.

          • That was my understanding – it was a bonus. When I worked on Capitol Hill from 93 to 95 it was a bonus.

            If that is still the case, well that should stop.

            Pay your taxes on this benefit just like rest of the world.

          • Kev29

            OK – ‘many’ private sector and non-profit workers in the city use Smart Benefits as a means to save roughly 30% on their *nation’s most expensive* transport costs by not paying taxes before purchasing (and there’s no monthly or annual reduced fare like most cities). I hope we don’t throw the baby out with the bath water, just because some have a negative image of the program because it’s a bonus for those apparently detestable federal employees. I know it was $120 before the Stimulus addition, but I don’t really understand the parking changes – that just seems confusing.

          • ah

            It is a tax-free benefit. The Tax code specifies that transit subsidies used for commuting, up to $230/month, are tax free. This applies to anyone, fed gov’t or not. It also allows people to place that amount onto their smarttrip card using “pre-tax” dollars.

            There is a separate authorization for federal agencies to pay a transit subsidy to employees up to the amount of the tax exemption.

          • Anon

            Thank you Ah! Finally someone not talking out of their ass.

            Next person who says federal employees are “overpaid” gets pistol whipped.

          • Anonymous

            +1. NOT JUST A FEDERAL BENEFITS so it’s kind of a weak argument.

            Sucks for you that you’re company doesn’t offer flexible spending accounts then…

      • Jessica

        So then everyone should also be paying taxes on their parking spaces that they get in place of Metro benefits.

        Also, as a non-high paid federal employee, I LOVE how everyone thinks we’re rolling in it. Clearly you don’t know many feds, as most feds are under GS11.

        • Not true. As a DC native I know of many well paid Federal Employee “Life members.”

          By the way, hold tight to your wallets and thank the tea party… they are coming for your “pre-tax benefits.”

      • jcm

        Do you pay taxes on the portion of your health insurance paid by your employer?

    • MAR

      I receive the smartbenefits…but people shouldn’t look at it as a cut…its just returning to normal (prestimulus). I am not sure I understand why some people feel entitled to the $230 even though it was temporary.

      That said, surprisingly the $120 is pretty easy to exceed especially now with Metro’s new peak of the peak or whatever.

  • Not a Fed

    $0 for me!

  • b

    can we just eliminate this altogether?

  • jimmycrackcorn

    Yes of course! However, fair is fair, so we will also have to eliminate any free or reduced parking provided by either private sector or fed gov’t for their employees. Sorry!

  • Jim

    I don’t understand why people see it as a “bonus” or perk or extra or whatever. It’s just a part of overall compensation, which for a majority of federal government employees in professional positions is substantially below private sector compensation.

    Moreover, it’s an inferior form of compensation, since, unlike simply receiving an additional $1,000 in salary, SmartBenefits can only be spent on transportation.

  • quincycyclist

    I do hope all you high paid Federal Government workers have been paying your taxes on that benefit too.

    I am in private industry and we get a 1099 for employee gifts over $100.

    Of course I know many people who just sold their benefits before the smart cards.

    It’s a tax-free benefit. Just like parking (up to $230 which will STAY at $230) is a tax-free benefit. Even if you don’t work for the government your employer can give you tax-free transit, or set up a system by which you pay for transit using tax-free deductions from your paycheck. Kev29 has it right.

    It’s not an “employee gift.” It’s a benefit like health care is a benefit.

    Maybe you didn’t have it when you worked on the hill because the transit benefit only started in 1993 (and then only applied when employers paid for transit). Perhaps it hadn’t been implemented for you yet. The ability to use your own dollars pretax was only implemented in 1998.

    What’s ridiculous is that this benefit will be cut to a $120 limit while we will be subsidizing parking at $230.

    • DCster

      Are they really cutting transit benefits to $120 and maintaining a parking subsidy at $230?! Are you sure? I don’t see how that would be justified.
      I don’t receive this, not being a Fed, though our organization (as well as some other private or non-profit ones I know of) does provide a similar pre-tax commuter benefit. It’s not like it’s a Fed-only program (though we don’t get nearly as much).

      • ah

        It the tax exempted amount, not the subsidy. So an employer can give up to $120 of transit benefits or $230 of parking benefits before the employee has to pay tax on the benefits. It doesn’t say what the employer *must* give, just what he can give before the employee pays tax.

        For federal employees, extremely few of them receive free parking, so it isn’t an issue for many of them.

      • Anonymous

        Agree with AH. Um…. it’s NOT just a fed benefit.

        Private companies can offer its employees the same pre-tax benefits through Flexible Spending Accounts (and yes the public transit will be under the new $120 policy and is different from the parking benefits). It’s not just a Federal employee option.

  • Don’t you all understand – Right or wrong, tax free or pre-tax, this is the kind of thing the Tea Party and so called “average” voters in the middle of the country want stopped.

    Have you not been listening. It starts with a reduction in your smart benefits, then freeze on your pay for a year, then a few years, and so on…

    They don’t get it so we shouldn’t. That is how they think.

    Now take a sip of that tea.

    • Marcus Aurelius

      Yes. Republicans always accuse Democrats of “class warfare” when Democrats point out how the only class that has done well over the past 30 years is the rich; the poor and middle class have gotten nowhere or lost ground. But Republicans stoke “intra-class warfare,” in which they tell middle class voters that the problem is not the rich getting richer with little or no benefit to anyone else, it’s certain middle class people (like government workers and union members) getting more benefits than other middle class people. So the solution to your inability to afford healthcare is not to give you access to the same healthcare government workers have, it’s to take away government workers’ healthcare so they are just as screwed as you are. The solution to unemployment is not to create non-government jobs but to fire government workers so they are just as screwed as everybody else in the middle class.

      • Anon



Subscribe to our mailing list