Bicycle Commuter Provision Included in `Bailout Bill`
by Louisa May
A transportation fringe benefit to bicycle commuters is tucked neatly into the Emergency Economic Stabilization Act that was signed into law October 3, 2008.
Keep scrolling, you’ll find it ( House Resolution 1424, Section 211, for you die-hard readers of legislation).
The passing of this act into law is a big win for cyclists who commute to work, offering tax fairness, and the financial benefit might give more people an incentive to try it.
Effective January 1, 2009, employers can offer transportation fringe benefits to employees who bike to work, just as they extend benefits to employees who commute by car or transit. Under the new law, for employees who regularly commute to work by bicycle, employers may offset the cost of bike purchase, improvement, repair, and storage at a rate of $20.00 per month per employee.
Depending on how the employer chooses to offer the benefit, the employee may bring in receipts to be reimbursed, sign up for regular monthly payments, or devise a voucher system.
The IRS is still working out the details, but a few rules are already in place. Bike commuters are not allowed to receive transit or parking benefits in addition to receiving the bike benefit. (Transit users get $115.00 tax credit per month and employees who commute by car and park receive $210.00 monthly.) This tax credit, for now, is capped at $20.00 per month per employee. The original request was for $80.00 per month but was cut back in a legislative compromise. Eventually, supporters hope to see the cyclist credit raised, but this bill has been in front of Congress for seven years, sponsored by Congressman Earl Blumenauer (D-Oregon) and Senator Ron Wyden (D-Oregon). The goal was to finally see it passed into law, and the next step will be to increase the allowance.
Many businesses already offer incentives for cyclists. Discovery Communications reimburses each employee $350.00 for purchase of a bike and has designed its three Washington D.C. offices with bike commuters in mind, incorporating secure bike racks, day lockers, and showers into the workplace. At its Sunnyvale and Santa Clara, California office buildings, Yahoo! not only offers employees bike lockers and shower facilities, but has initiated a “bike buddies” matching program, making it easy for employees to share bike commuting trips. And Google, at its headquarters in Mountain View, California offers employees bike tune-ups once a month.
Bicycle commuters have more fixed commuting expenses than their counterparts driving in cars, since their expenses are not as affected by daily distance.The positive intent of the provision was not only to offer some financial assistance to cycling commuters, but to suggest to all employees that biking to work is a good idea.The League of American Bicyclists is working with the IRS to help establish more guidelines for interested employers.
Putting personal, financial considerations aside for a moment, bikers’ safety is important, too. If you find yourself at a community meeting, now is a good time to start a conversation about improving your community infrastructure by adding bike lanes. The new benefits can save you money, but bike lanes can save your life.
Check out our Green Pages for information on money saving tips that help the environment. Once there, click on the Green Forum for more articles by feature writer Louisa May.
American Apartment Owners Association offers discounts on products and services related to your commercial housing investment, including real estate forms, tenant debt collection, tenant background checks, insurance and financing. Find out more at www.joinaaoa.org.
To subscribe to our blog, click here.
Accessibility