The federal tax bill widely expected to receive congressional approval this week could have an impact on workplace benefits for commuters.
The bill would eliminate the tax deduction businesses can take for providing employees with benefits for parking, transit passes, cycling costs, or other forms of transportation. Companies can currently deduct up to $255 a month for each employee receiving such benefits.
The change would not affect a more widely used commuter benefit that allows employees to pay for transit passes using pretax income.
Still, some advocates worry that eliminating the employer deduction could result in fewer companies offering to pay for employees’ transit passes, causing a decline in public transportation ridership.
“The concern is that if employers can’t write it off, they won’t offer it. And if they don’t offer it, it’s a loss to the employees,” said Rob Healy, vice president for governmental affairs at the American Public Transportation Association. “It could ultimately hurt the ridership.”
Others see less of a threat, noting that it’s relatively rare for companies to pay for workers’ transit passes, and those that do may not have just a tax benefit in mind.
“The reasons for providing the subsidy rise above monetary callings,” such as employee recruiting and retention, Jason Pavluchuk, government affairs director for the Association for Commuter Transportation, said in a report on the bill.
Additionally, Pavluchuk said, it’s far more common for companies to deduct the cost for paying for employee parking — which would also be eliminated.
“One could argue there is an opportunity for transit supporters to take advantage of the change because more employers will be impacted by the inability to write off parking than employers impacted by the ability to write off transit,” he said.
One company that pays for its workers’ transit passes, the Cambridge-based online auto insurance company EverQuote, said a tax-code change was unlikely to affect its plans.
“If the federal tax benefit disappears, our employees will still receive free T passes as part of their benefits package,” said spokesman Ryan Ruffing. “We’re more than happy to provide free transportation for our employees regardless of whether there is a tax benefit to the company.”
It’s unclear how many companies offer free or subsidized T passes. The MBTA said it does not chart that.
Some of the larger organizations to offer free passes, such as the Massachusetts Institute for Technology, are nonprofit entities and do not face the same tax burdens as private companies.
In Massachusetts, commuters can deduct the cost of transit passes from their state taxes, though they are ineligible for much of the benefit when employers pay for the pass.
Bicycling activists are upset that the federal bill would suspend a program that allows them to use up to $20 a month for bike expenses paid by their employer tax-free.
“It’s so modest and such a pittance that this is less about the dollars and cents and more about the attitude of it,” said Richard Fries, of the Massachusetts Bicycle Coalition. “Bicycle stuff is so inexpensive that they don’t have any respect for it.”