I 

111TH CONGRESS 

1ST SESSION H. R. 55 

To amend the Internal Revenue Code of 1986 to allow employers a refundable 

credit against income tax for 50 percent of the employer’s cost of providing tax-free transit passes to employees. 

IN THE HOUSE OF REPRESENTATIVES 

JANUARY 6, 2009 

Mr. KIRK (for himself, Mr. LIPINSKI, Mrs. BIGGERT, and Mr. ROSKAM) introduced the following bill; which was referred to the Committee on Ways 

and Means 

A BILL 

To amend the Internal Revenue Code of 1986 to allow employers a refundable credit against income tax for 50 

percent of the employer’s cost of providing tax-free transit passes to employees. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Creating Opportunities 

5 to Motivate Mass-transit Utilization To Encourage Rider6 ship Act of 2009’’ or the ‘‘Commuter Act of 2009’’. 


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1 SEC. 2. REFUNDABLE EMPLOYER CREDIT FOR PROVIDING 

2 TAX-FREE TRANSIT PASSES TO EMPLOYEES. 

3 (a) IN GENERAL.—Subpart C of part IV of sub4 chapter A of chapter 1 of the Internal Revenue Code of 

5 1986 (relating to refundable credits) is amended by insert6 ing after section 35 the following new section: 

7 ‘‘SEC. 35A. EMPLOYERS PROVIDING TAX-FREE TRANSIT 

8 PASSES TO EMPLOYEES. 

9 ‘‘(a) IN GENERAL.—In the case of an employer, there 

10 shall be allowed as a credit against the tax imposed by 

11 this subtitle for the taxable year an amount equal to 50 

12 percent of the amount paid or incurred by the taxpayer 

13 during the taxable year— 

14 ‘‘(1) for transit passes provided to employees of 

15 such employer, and 

16 ‘‘(2) as cash reimbursements made to such em17 ployees for transit passes purchased by such employ18 ees. 

19 ‘‘(b) LIMITATION TO TAX-FREE TRANSIT PASSES.— 

20 Subsection (a) shall apply to a transit pass (or reimburse21 ment) provided to an employee only to the extent that the 

22 employer reasonably expects that the value of such pass 

23 (or the amount of such reimbursement) is excludable from 

24 such employee’s income under section 132. 

25 ‘‘(c) EXCLUSION OF NONTAXPAYERS.—Subsection 

26 (a) shall not apply to any employer which is exempt from 


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1 the tax imposed by this chapter with respect to the activity 

2 in which the employee is performing services for the em3 ployer. 

4 ‘‘(d) DEFINITIONS.—Terms used in this section shall 

5 have the respective meanings given such terms by section 

6 132.’’. 

7 (b) DENIAL OF DOUBLE BENEFIT.—Section 280C of 

8 such Code is amended by adding at the end the following 

9 new subsection: 

10 ‘‘(g) EMPLOYER CREDIT FOR PROVIDING TAX-FREE

11 TRANSIT PASSES TO EMPLOYEES.—No deduction shall be 

12 allowed for that portion of the expenses (otherwise allow13 able as a deduction) taken into account in determining the 

14 credit under section 35A for the taxable year which is 

15 equal to the amount of the credit allowable for such tax16 able year under section 35A(a).’’. 

17 (c) CLERICAL AMENDMENT.—The table of sections 

18 for such subpart C is amended by inserting after the item 

19 relating to section 35 the following new item: 

‘‘Sec. 35A. Employers providing tax-free transit passes to employees.’’. 

20 (d) EFFECTIVE DATE.—The amendments made by 

21 this section shall apply to transit passes provided after the 

22 date of the enactment of this Act in taxable years ending 

23 after such date. 

Æ 


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