The Bicycle Commuter Tax Provision

The Bicycle Commuter Act of 2008, which became a law on January 1, 2009, is a transportation fringe benefit that provides a small sum to qualified employees to offset costs incurred through bicycle commuting. Passed as an addendum to the larger Renewable Energy Tax Credit legislation, the tax provision sought to elevate cyclists to the same level as people who received qualified transportation benefits for taking transit.

This tax benefit is mutually beneficial for employers and employees. Receiving the bicycle commuter tax provision is estimated to save 40% on every dollar that is used through the program for employees, while employers should save around 10% on every dollar in saved payroll taxes (San Francisco Bicycle Coalition 2010). The actual text of the law can be found at http://www.bikeleague.org/news/100708adv.php.

The provision functions as a benefit offered by employers to those employees that regularly use a bike for a "substantial" portion of travel between home and work. Meeting the "substantial" portion requirement usually means biking three days out of every five for full-time employees and less for part-time employees. The benefits include offsetting fixed costs associated with bicycling, including the cost of a commuter bike, bike lock, helmet, bike maintenance and the provision of bike parking and showers at work. Individuals that receive this benefit, up to $20 per month, cannot receive any other qualified fringe transportation benefits.

If you are interested in receiving this benefit, inform your employer that you (as well as any other bicycle commuters in your office) want this benefit. Your employer can either contract with a Commuter Benefit Provider, an outside consultant that will manage the reimbursement system, or set up an in-house reimbursement scheme. Verify how and when you will be reimbursed before going on a shopping spree, and be sure to keep your receipts!

References:

  1. League of American Bicyclists. (2010). Bicycle Commuter Tax Provision: Frequently Asked Questions.
    Retrieved from http://www.bikeleague.org/news/100708faq.php.
  2. San Francisco Bicycle Coalition. (2010). Commuter Tax Benefit.
    Retrieved from http://www.sfbike.org/?commute.
  3. Yardley, W. (2008). Bicycle Commute Tax Break is a Bittersweet Victory for Measure's Sponsor. The New York Times. Retrieved from http://www.nytimes.com/2008/10/10/us/10bike.html.