This is great. You know how they (our loyal legislators) always end up burying all kinds of pork in the bills that get passed? Well here is something I would have never expected. Our friend at the EPA sent us this little tidbit that was buried in the “Bailout” package passed by congress just recently.
TRANSIT: Bailout bill offers tax break for bike commuters (10/09/2008)
Thanks to a provision in the $700 billion financial bailout bill, bicycle commuters will be eligible for a federal tax benefit.
Beginning in January, those who use a bike as their primary transportation mode to get to and from work will be eligible for a $20-per-month, tax-free reimbursement from their employers for their bicycle-related expenses. Employers will be able to deduct that expense from their federal taxes.
“It significantly legitimizes bicycling and elevates it to a credible commute mode, like riding a bus or train,” said Andy Thornley, program director for the San Francisco Bicycle Coalition.
The money can be used to buy, store, maintain or fix bikes that are used for a substantial part of an employee’s commute.
Bicycle advocates have pushed for seven years to try to get such a provision passed through Congress, but were unsuccessful until lawmakers squeezed pet provisions into the Wall Street bailout package approved last week (Rachel Gordon, San Francisco Chronicle, Oct. 9). – RB
It doesn’t quite match this but it is a start.
Micah
8 responses so far ↓
1 insurancesitesfind » Blog Archive » Bicycleage Reimbursement // Nov 8, 2008 at 6:43 am
[...] Beginning in January, those who use a bike as their primary transportation mode to get to and from work will be eligible for a $20-per-month, tax -free reimbursement from their employers for their bicycle-related expenses. … Read more [...]
2 dustin // Nov 10, 2008 at 1:33 pm
Micah, how do cyclists go about getting this reimbursement in 2009 from their employers? It’s about time incentives were introduced to promote alternate transportation. That’s adds up to $240 annually, I love it.
3 Micah // Nov 10, 2008 at 3:38 pm
I am sure it will take a little cajoling to get employers to take the steps to implement this. If it is anything like auto reimbursement your employer will want a reimbursement form to document the miles traveled. Although in this case it is not about miles traveled but rather vehicle choice. I don’t know if you need to ride 100% of the time or not. I would have to ask our accountant. I would venture to guess that the progressive employers will just reimburse those who apply, for a Benjamin each month.
4 wburg // Nov 11, 2008 at 4:21 pm
I wonder if there will be a pedestrian or public transit version for us uncoordinated non-auto-commuting types?
5 AJ // Nov 12, 2008 at 9:23 am
There is a mass transit (buss, rail, vanpool) version of this that is considerably higher ($100+) I can’t confirm that the bike program is this way, but the mass transit version is sort of a reimbursement. It’s a pretax benefit that you can take. Now whether you take that from your existing salary or your employer provides it as a benefit is up to the employer.
Under the first scenario you save taxes on whatever your bus pass costs because you can pay for it with pretax dollars. Under the second scenario your employer pays for the bass pass for you (or reimburses you for it). Employer gets to save some on payroll taxes and employee gets to save a little on income taxes or gets a free buss pass.
6 wburg // Nov 12, 2008 at 4:05 pm
Spiffy! I guess all of us “walk to work” people don’t necessarily get a tax break, other than lowered expenses (although I notice I have to buy new shoes about twice as often) and the wonderful exercise.
7 AJ // Nov 12, 2008 at 4:16 pm
wburg, as a walker you would qualify for the parking cash out if your employer opted into it. It’s the biggest $ perk of all available actually. I forget the exact amount, but thought it was in excess of $200/month.
8 AJ // Nov 12, 2008 at 4:33 pm
Couple links for those more interested in learning more:
http://www.irs.gov/publications/p15b/ar02.html#d0e2102
old #’s but good explanation: http://www.coredocuments.com/core132.php
want help to implement this at your job site? contact your local TMA: http://www.sacregion511.org/rideshare/tma.html
Leave a Comment