New Bicycle Commuter Benefit Effective 1/1/09

Beginning January 1, 2009, employees who regularly use their bicycles to get to and from work will be eligible for a $20-a-month, tax-free reimbursement from their employers for bicycle-related expenses. Employers will in turn be able to deduct the expense from their federal taxes.

The Bicycle Commuter Act was part of the larger set of Renewable Energy Tax Credit Initiatives included in the Emergency Economic Stabilization Act of 2008, a.k.a. the “Wall Street Bailout Bill, signed into law by President Bush in early October 2008. Section 211 of the “Emergency Economic Stabilization Act of 2008″ allows for a “qualified bicycle commuting reimbursement” for “reasonable expenses incurred by the employee…for the purchase of a bicycle and bicycle improvements, repair, and storage, if such bicycle is regularly used for travel between the employee╒s residence and place of employment.”

“We’re hearing that a lot of employers don’t know anything about the bicycle commuter provision, nor that it goes into effect at the first of the year,” said Peter Harkness, Board of Directors Chair of the National Center for Bicycling & Walking (NCBW). “This provision is a matter of equity; it gives bike commuters similar benefits to those already enjoyed by those who drive or take public transit to work.”

The $20-a-month bicycle commuter benefit comes in well behind the $115 mass-transit benefit already available, or the $300-plus parking subsidies aimed at helping those who drive to work. “The original ask was for an $80-a-month benefit ,” said Harkness. “But during the compilation of the House and Senate bills, the compromise amount was set at a maximum $20 a month. It’s not a perfect program, but it’s a good start.”

Sharon Roerty, NCBW’s executive director, agrees. “There are a lot of inexpensive ways to encourage more bicycling and make a cyclist’s life easier, and maybe this benefit will encourage efforts in that direction. More people might give bicycle commuting a try if they know their business supports it, even at this basic level.” Roerty noted that employers may reimburse employees, tax free, for expenses including equipment and bike purchases, bicycle parking, repairs, shower facilities, and storage. “The Christmas gift is there for bicycle commuters, but you’ve got to tear the wrapping off and get your employer involved,” she said.

The League of American Bicyclists is maintaining a Frequently Asked Questions page pertaining to the Bicycle Commuter Act here.

Compliments of the National Center for Bicycling & Walking’s CenterLines, the bi-weekly e-newsletter.