Tax Day

Did you know that you may be eligible for a tax deduction for commuting by bike?  That's right, according to this Forbes article, "if your employer offers a reimbursement program to bike commuters, that reimbursement is not considered income for reporting purposes on your federal income tax return.

Your employer can offer a tax-free reimbursement of up to $20 multiplied by the number of qualified bicycle commuting months. A qualified bicycle commuting month is any month that you regularly use the bicycle for a substantial portion of the travel between your residence and place of employment so long as you do not also receive transportation in a commuter highway vehicle, any transit pass or qualified parking benefits. The reimbursement should be earmarked for bicycle expenses; those would include the purchase of a bicycle and bicycle improvements, repair and storage.

Your employer could offer you a larger reimbursement but any amounts in excess of the $20/month would not be considered de minimis and would be reportable as income on your federal income tax return.

This particular perk had actually expired but was revived extended as part of the American Taxpayer Relief Act of 2012 (yes, it was actually passed in 2013). The new deadline is December 31, 2013, which means that without further extension, this is the last year you can claim the tax break."

The U.S. Department of the Interior is on top of this, announcing their 2014 Bicycle Subsidy Benefit Program recently.  (Kudos, federal govt!!)

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According to the National Center for Biking and Walking, this "Bicycle Commuter Act" went into effect January 1, 2009: "Basically, if your employer reimburses you up to $240 annually and does not give you a transit pass, qualified parking, or other transportation, then you can exclude the up to $240 from your gross income. It's tax-free to the employer in the sense that they can deduct that just like any other wage expense, but more importantly it's taken right off the top from taxable income as far as the taxpayer is concerned. But, it's all contingent upon an employer reimbursing for bicycle expenses."

So - is the law still applicable, and how do you get the benefit?  The Bike League provides answers HERE!  Are you an employer who wants to implement this at your place of business? For a sample employer's guidelines, look here

For more, see also this New York Times Article, 2009.