photo-Tim Nelsen MPRThe Bicycle Commuter Act (effective January 1, 2009) was designed to be an equitable provision that puts cyclists on the same footing as people who get tax breaks for taking transit or parking their cars at work.
The Act allows up to $20.00 per qualified commuting month for bicycle commuters. Employers must agree to participate and those who do can provide bicycle commuter employees up to $20.00 per month tax free for reasonable expenses related to bicycle commuting. Reasonable expenses include the purchase of a bicycle and bicycle improvements, repair, and storage.
Types of savings/ How you will get reimbursed:
Employees and employers save income and payroll taxes on the amount of money provided for qualified transportation fringe benefits for commuting. Up to $20 per month ($240 per year) can be provided tax-free for bike commuting. Due to the tax savings, employees can save in annual commuting costs, while employers save on Federal and State income taxes; Social Security (FICA) taxes paid by both employers and employees, and unemployment, disability, workman's compensation and retirement costs driven by salary.
Based on how the employer chooses to offer the benefits, the employee may bring receipts to be reimbursed, may sign up for regular monthly payments, or devise some sort of voucher system with their employer.
Exempted Bicyclists:
Those who are self employed will not benefit from the act. Those who already receive transit or parking money can not receive the $20.00 in addition.
Qualified bicycle commuting month: For any employee, a qualified bicycle commuting month is any month the employee:
1. Regularly uses the bicycle for a substantial portion of the travel between the employee's residence and place of employment and
2. Does not receive:
a. Transportation in a commuter highway vehicle,
b. Any transit pass, or
c. Qualified parking benefits.
The Act allows up to $20.00 per qualified commuting month for bicycle commuters. Employers must agree to participate and those who do can provide bicycle commuter employees up to $20.00 per month tax free for reasonable expenses related to bicycle commuting. Reasonable expenses include the purchase of a bicycle and bicycle improvements, repair, and storage.
Types of savings/ How you will get reimbursed:
Employees and employers save income and payroll taxes on the amount of money provided for qualified transportation fringe benefits for commuting. Up to $20 per month ($240 per year) can be provided tax-free for bike commuting. Due to the tax savings, employees can save in annual commuting costs, while employers save on Federal and State income taxes; Social Security (FICA) taxes paid by both employers and employees, and unemployment, disability, workman's compensation and retirement costs driven by salary.
Based on how the employer chooses to offer the benefits, the employee may bring receipts to be reimbursed, may sign up for regular monthly payments, or devise some sort of voucher system with their employer.
Exempted Bicyclists:
Those who are self employed will not benefit from the act. Those who already receive transit or parking money can not receive the $20.00 in addition.
Qualified bicycle commuting month: For any employee, a qualified bicycle commuting month is any month the employee:
1. Regularly uses the bicycle for a substantial portion of the travel between the employee's residence and place of employment and
2. Does not receive:
a. Transportation in a commuter highway vehicle,
b. Any transit pass, or
c. Qualified parking benefits.
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