Bicycle Commuter Act
What is the Bicycle Commuter Act?
The Bicycle Commuter Act is a tax incentive that allows employers to offer a benefit of up to $20 a month for those who regularly commute to work by bike. The benefit is intended to offset the costs of bike commuting. Eligible expenses include such things as a new bike purchase, regular maintenance costs, and the purchase of such things as a bike helmet, lock, lights or other safety gear and for expenses like bike storage and parking.
History of the Legislation
The Bicycle Commuter Act, championed by Congressman Earl Blumenauer (D-Oregon), has been in the works for seven years, but it was the bills attachment to the $700 billion economic stimulus package of 2008 that finally saw its passage.
Interestingly, Blumenauer voted against the package even though his long term piece of legislation was attached. He was opposed to the economic stimulus package on the grounds that it did not do more to help individual home owners.
Now the actual tax provision is in the hands of the IRS and the millions of business owners who have to decide how this will be administered and what the true benefit for bicycle commuters will be.
How does it work?
The IRS has not worked out the details yet, but at this time each employer has the right to offer the benefit or not. Individual employers also have the right to choose how the program will be conducted in their workplace.
When does it take effect?
The act takes effect on January 1, 2009
What do employers need to do?
Employers need to establish their own system of how the program will work. Options include:
- a tax credit deduction for employees
- an actual reimbursement for expenses
- a voucher system.
How the Statue Reads
Read the statute on the League of American Bicyclists' website.
