What is the Bicycle Commuter Tax Benefit? On January 1, 2009, the Bicycle Commuter Act added bicycle commuting reimbursement to a transportation benefit covered under 132 (f) of the Internal Revenue Service Code (26 U.S.C. sec. 132(f)). Under this law, employees may provide a reimbursement of up to $20 per month for qualifying expenses incurred as employees commute to work via bicycle. The employee may not cover their own expenses with tax-free income. These funds must be received as a benefit from the employer to be eligible to be tax-free.
What expenses can be reimbursed? Reimbursable expenses include the cost of the bicycle, any related accessories such as a helmet or lock, bicycle parking expenses, and any necessary bicycle maintenance.
If I drive on rainy days but bike on all other days, is it considered a bicycle commuting month? A bicycle commuting month is any month that an employee has used a bicycle as transportation between their residence and place of employment regularly. The employee who receives a bicycle commuter tax benefit is not eligible to also receive any other transportation benefit, such as transit or parking.
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How can a company offer this benefit to employees? Companies can choose various techniques to offer this valuable benefit to employees. Some companies provide monthly cards that allow employees to pledge to bike to work a certain number of days. Other companies are providing tracking logs for employees to monitor their biking days.
Companies can either provide a cash reimbursement in-house or use a qualified benefit provider such as Commuter Benefit Solutions. Companies like Commuter Benefit Solutions coordinate the program completely, so that employers can effortlessly implement these beneficial programs.
For more information, please review IRS Publication 15-B (2016), Employer’s Tax Guide to Fringe Benefits.
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At Kass & Moses, our team of nationwide bicycle crash attorneys stand behind the benefits of bicycle commuting. From the outstanding physical fitness benefits to the reduction in the use of carbon-polluting vehicles, we are proud to see more bikers on the road than ever before. As always, bike safely, and if you are ever in an accident, contact the team of bikers who know you best!