Bicycle Commuter Tax Provision

Discussion in 'Laws, Legislation & Emissions' started by neicull, Apr 6, 2009.

  1. neicull

    neicull Member

    $240/yr Provision from IRS for Biking to Work!
    Basically if your employer participates you can receive $20/mo if you bike to and from work 60% of the month. Not a bad deal for doing what most of us would like to do.. In most cases you can pay for a motor kit and some extras with that in a year!

    IRS LINK: http://www.irs.gov/publications/p15b/index.html

    Original article: http://www.bikeleague.org/news/100708faq.php

    Abridged version: http://www.ghentcruisers.com/240yr-provision-from-irs-for-biking-to-work
     

  2. Happy Valley

    Happy Valley Active Member

    It's a start, for sure. The "if your employer participates" caveat might mean you have to persuade them to participate if they don't.

    My wife rides to works 99% of the time all seasons but she works for a non-profit. Their answer to her request was since they don't make a profit they can't claim a credit. We are looking to see if we can claim it on personal taxes instead.

    And for irony, my partner in the MB thing also works full time as a bicycle mechanic. The owner declined to participate stating he didn't want to deal with the paperwork.....and this is at a bike shop!
     
  3. neicull

    neicull Member

    I doubt there's that much paperwork, but I have no clue really. Larger companies have people specifically for this. Employee Benefit Administrators. They look for this kind of thing. I hope it catches on in Norfolk. As for the bicycle shop owner turning it down.. shame on him.
     
  4. JinbaIttai

    JinbaIttai Member

    I've heard that this law has been interpreted to mean you can receive up to $20 of your income per month tax free to use to maintain your bike, if you use it to commute 60% of the time or whatever the requirements.

    That works out to closer to $5 a month unfortunately.
     
  5. neicull

    neicull Member

    I believe it is interpreted that way. But it's still $20. That's similar to saying you make $15/hr but in reality after taxes you make $10/hr.

    The exclusion for qualified bicycle commuting reimbursement includes any employer reimbursement for reasonable expenses incurred by the employee during the calendar year.

    I don't think it means $20 of your normal pay is tax free. I'm reading it to mean.. when the employer reimburses you (up to $20) you get that money tax free (be it and itemized payment on your check or a voucher).
    I know there are services that give the employer a voucher to hand to the employee good for use at participating bike shops. Most of the due diligence is with the employer. Just like if they pay for your parking etc. The individual doesn't deal with the paper work they just receive the benefit.
    I thought it was a topic to let people know about and all in all it's something, a small incentive, but noteworthy. 20 bucks is 20 bucks, I'll take it.
     
Loading...