NEW YORK — Any bit of savings helped when Eileen Damore was spending more than $400 a month to travel by train and subway from her Long Island home to her job at a printing company in Manhattan.

So she enrolled in a benefit that allows commuters to deduct up to $270 a month from their paycheck for transit expenses while lowering their taxable income. But when Damore, a pricing manager, started working from home early last year because of the pandemic, the transit benefit kept being taken out of her paycheck until she remembered to stop it.

Now, she has $662.50 that she cannot use or get back.

“It wasn’t top of mind to stop the deduction,” Damore said.

The unused benefits have become another headache for many commuters in New York, where more people use public transit than in any other American city and where the pandemic has emptied out subways, trains and buses.

The benefits, which aim to reward commuters for taking transit to work, could now end up costing people money instead.

Many commuters have hundreds or even thousands of dollars tied up in transit benefits — money they earned and cannot use for other purposes like bills and mortgages. And they risk losing these benefits if they are laid off or change employers, or if they simply do not go back to taking public transit.

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Before the pandemic, about 1 million people commuted daily to New York from surrounding suburbs, according to a 2019 city planning report. Of those commuters, about 61% used transit, while 38% drove.

“I hear from people when they’re unhappy and this is one of the biggest things they’re unhappy about,” said Gerry Bringmann, chairman of the Long Island Rail Road Commuter Council, an advocacy group for riders, who has received dozens of complaints about money locked up in transit benefits.

The issue has even fueled a black market for Long Island Rail Road passes, Bringmann said. Commuters are using transit benefits to buy passes and then selling them at a discount to recoup some of their money.

A bipartisan congressional group representing Long Island and Queens, including Reps. Kathleen M. Rice and Thomas R. Suozzi, has urged the Treasury Department and the IRS to consider options to help people who have accumulated unused commuting benefits during the pandemic.

The Metropolitan Transportation Authority, which operates the subway, buses and two commuter rails, has called on the IRS to give riders access to their unused transit funds. The authority itself has offered more ticket flexibility during the pandemic by allowing riders to use transit benefits on 10-trip tickets instead of just monthly passes.

“The current regulations are creating a difficult situation for customers whose commuting patterns have changed,” said Pat Foye, chairman of the authority.

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Existing rules already provide flexibility by allowing deductions to be reduced or stopped, a Treasury official said. The Treasury and IRS did not respond to questions for this story.

And some employers are giving commuters the option of applying unused transit funds to parking near their offices, which is usually not considered a transit expense, after the Treasury gave its approval.

But the economic shock set off by the pandemic has caused many people to lose their jobs and, under current regulations, they forfeit whatever funds they had accumulated under the transit benefits.

“Let’s be clear, this money belongs to the commuters,” said Rice, a Democrat. “It is wrong that they cannot access it when they have either lost their job or have to work from home.”

Let’s be clear, this money belongs to the commuters. It is wrong that they cannot access it when they have either lost their job or have to work from home.”
— U.S. Rep. Kathleen M. Rice, D-N.Y.

Damore knows what it’s like to see transit benefits disappear. In 2011, she had $500 set aside for her commute when she was laid off from a Manhattan pharmaceutical company. She never saw that money again.

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Now, Damore said, she felt like she was being penalized again because her work life had been upended by something out of her control.

“I feel the rules have to be reconsidered based on everything that changed in the pandemic,” she said.

The transit benefit, which was introduced in 1992 as part of a federal energy law, aims to promote mass transit as an alternative to driving.

“It’s a way to incentivize people to use modes of transportation that are not congesting or polluting the city,” said Sarah Kaufman, associate director of the Rudin Center for Transportation Policy and Management at New York University, who supports legislative efforts to expand the transit benefit to cover bike commutes, which have surged during the pandemic.

A handful of cities including New York, San Francisco and Washington, as well as the state of New Jersey, have mandated that certain employers offer transportation benefits to their workers. In New York City, most employers with 20 or more full-time employees are required to offer the benefits.

The benefit has helped increase transit ridership in some cities and can save individual commuters hundreds of dollars in taxes a year, depending on how much they spend on transit and their income tax bracket, said Tony Dutzik, an associate director for Frontier Group, a research and public policy organization.

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Still, the transit benefit is used by only a small fraction of the nation’s overall workforce — estimated at 2% in a 2014 report that Dutzik helped write — because many employers do not offer it and commuters outside of major metropolitan areas primarily drive to work.

Addressing the issue of unused transit funds during the pandemic was important to ensure that commuters will want to continue using the benefits, Dutzik said.

“If you or someone you know has lost income because you set aside money for transit, that’s going to cause people to think twice in the future,” he said.

Francena Amparo, 43, a legal assistant who lives in the Hudson Valley, did not sign up for the transit benefit this year because she still has $1,137 left over from last year. Amparo, who used to spend $475 a month on a Metro-North train pass to commute to Manhattan, has been working from home during the pandemic.

“I’m unhappy because it’s a lot of money,” said Amparo, adding that she could use the funds to pay down her bills. “Having that large of a sum of money sitting in an account — without access to it — is troubling.”

Under federal rules, any unused funds for transit benefits cannot be returned to commuters, though the money can usually be rolled from one year to the next depending on an employer’s specific plan. Some employers may charge fees to do so.

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“There’s no cash refunds for anyone,” said Theresa Adams, a senior adviser for the Society for Human Resource Management, an international association of human resource professionals.

Bruna Ribas, a spokeswoman for Edenred Benefits, which administers transit benefits for hundreds of thousands of commuters including employees of The New York Times, said that any unused funds in its plans will never expire as long as commuters remain with their current employers.

If commuters change jobs or are laid off, they lose any unused funds, which go to their employers. Some companies have used the forfeited money to help cover the transit benefits’ administrative costs or redistributed the money to other employees in the plan, Adams said.

The pandemic has left many commuters uncertain about their jobs and commutes even as the nation inches toward recovery.

Paul Fitzpatrick, 59, a lawyer who lives on Long Island, has $1,060 in transit benefits. He does not know when or if he will be able to use the money since he started working from home.

“It’s very much up in the air what the company will look like once things return to the new normal,” he said. “I’m not certain I’ll go back to commuting.”