Quietly tacked onto the end of the $700 billion Wall Street bailout bill last fall was tax provision that could benefit bicyclists.
A long-sought bicycle commuter tax provision now allows employers to provide regular bicycle commuters as much as $20 a month. The money is intended to be used for expenses related to bicycle commuting, such as buying a bicycle, helmet, lock, bag, tires or clothing. It is also intended as an incentive to promote bicycle commuting and to provide a least a little parity with tax incentives already in place for parking, participating in carpools or using mass transit.
The bicycling tax incentive went into effect with the start of the year.
According to a Frequently Asked Questions summary on the League of American Bicyclists website, employers must opt to offer the benefit. Those that do may reduce the payroll withholding taxes to cover the cost, making the benefit tax-free. The benefit for the employer is improved employee health and productivity due to increased physical activity and fewer days lost to illness. The benefit can also be seen as a no-cost tool to improve morale and retention of existing employees and recruitment of new employees. Any company can offer the benefit. None is too large or too small.
Accor Services, a commuter benefit services provider, has developed a program to facilitate using the benefit. Employers or third-party benefit companies can purchase benefit checks, or debit cards for the benefit amount, from Accor. The checks or cards can be used at bicycle shops.
The sponsor of the bill, Rep. Earl Blumenauer, an Oregon Democrat and a bicycle commuter, has been trying to get the provision through Congress for seven years. The total anticipated cost of the provision is expected to be $1 million per year. That compares to the $4.4 billion annual cost of parking and transit benefits.
