Bike Commuters Benefit From Changes in Tax Law

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Bike Commuters Benefit From Changes in Tax Law
Tuesday January 6, 2009

Added provision means cash back for those who bike to work

New in 2009 is a provision in the US tax code that allows bike commuters to be reimbursed up to $20 per month for expenses tied to their bike commuting from participating employers.

The reimbursements can be for just about anything related to bike commuting - from replacement tires to routine tune-ups at the bike shop to a whole new bike.

What is it?: Effective January 1, 2009, bicyclists can benefit from a provision added to Internal Revenue Code, which previously covered only commuters who used mass transit and van pools.

Now, thanks to the change in the tax law, employers can reimburse their workers who bike to work for certain bike-related expenses. These reimbursements are not included in your overall pay, so you're not getting hit with taxes on them either. Below are answers to frequently asked questions about this new benefit.
What Qualifies As A Bike Commute?
"Bike commuting"BikePortland.org

The guidelines for defining what qualifies as a bike commute are pretty broad. There are no minimum number of miles, and no specified actual number of days worked or percentage that you have to achieve to qualify.

Basically it shakes out like this. You are considered a bike commuter and eligible for reimbursement of qualified expenses in a given month if you regularly use your bike for a substantial portion of travel between home and work.

The IRS does not define either "regularly use" a bike or "substantial portion," so companies are left to apply their own interpretation.

David's Bicycling Blog

By David Fiedler, About.com Guide to Bicycling

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Has anyone been able to get this yet? I'm a civilian contractor and my contract company didn't seem to be very receptive to the idea.

Walt

Recumbent Guru

rydabyk wrote:

Has anyone been able to get this yet? I'm a civilian contractor and my contract company didn't seem to be very receptive to the idea.

Walt

About eight years ago, Arizona had implemented a disastrous Alternative Fuels program that provided outrageous cash incentives for people purchasing SUVs and pickups which could run on an alternative fuel such as compressed natural gas : Arizona Alt Fuels Debacle

Briefly: People were not required to run on the more expensive alternative fuel, they just needed to purchase a truck which "could" run on it and they would get a cash rebate of up to 40% of the vehicle's purchase price. You can kind of guess what happened: what was originally estimated to be a program which would cost the state about $3 million, and clean up the air, had ballooned into a projected $600 million state budget hit!

Every since then, governments and companies in Arizona have taken advantage of the specter of a financial catastrophe should they do ANYTHING to wean their citizens and employees from gasoline.

I don't see this new program as workable in this environment.

BluesCat cat

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