Buried in the Bailout: The Bicycle Commuter Act

October 23, 2008 Post a Comment

Bicycle commuters were extended a small benefit by Congress. Does it matter? (Photo: Associated Press)

Excerpt from the article in The New York Times Online, October 13, 2008
By ANDREA KANNAPELL

And all it took was a global financial meltdown.

There it is, a little driblet of encouragement to ride a bike to work - way, way down in House Resolution 1424, also known as the bailout bill:

SEC. 211. TRANSPORTATION FRINGE BENEFIT TO BICYCLE COMMUTERS.
(a) In General- Paragraph (1) of section 132(f) is amended by adding at the end the following:(a) In General- Paragraph (1) of section 132(f) is amended by adding at the end the following:”(D) Any qualified bicycle commuting reimbursement”. …

The bicycle commuter benefit, which is provided in its entirety here by the League of American Bicyclists, continues on for several paragraphs, establishing”limitations on exclusions,” “applicable annual limitations,” and other assorted legalese, but the essentials are these: Starting next year, employers who provide bike parking, bathing facilities, tune-ups, or other support for bicycle commuting, can deduct up to $20 a month per participating employee from their own taxable income.

Exactly how that will work is under negotiation with the Internal Revenue Service, and it remains to be seen whether businesses will in fact begin showering their sweaty, two-wheeled workers with rewards and incentives.

But celebration is still in order.
Original article continues

In other words, it allows for a “qualified bicycle commuting reimbursement” for “reasonable expenses incurred by the employee during such calendar year for the purchase of a bicycle and bicycle improvements, repair, and storage, if such bicycle is regularly used for travel between the employee’s residence and place of employment”- your bike expenses, up to 20 bucks a month, can be covered by your boss as a benefit tax free.
Read the full copy from Spacing Wire

“(a) In General- Paragraph (1) of section 132(f) is amended by adding at the end the following:

‘(D) Any qualified bicycle commuting reimbursement.’.

(b) Limitation on Exclusion- Paragraph (2) of section 132(f) is amended by striking ‘and’ at the end of subparagraph (A), by striking the period at the end of subparagraph (B) and inserting ‘, and’, and by adding at the end the following new subparagraph:

’( C ) the applicable annual limitation in the case of any qualified bicycle commuting reimbursement.’.

( c ) Definitions- Paragraph (5) of section 132(f) is amended by adding at the end the following:

‘(F) DEFINITIONS RELATED TO BICYCLE COMMUTING REIMBURSEMENT-

‘(i) QUALIFIED BICYCLE COMMUTING REIMBURSEMENT- The term ‘qualified bicycle commuting reimbursement’ means, with respect to any calendar year, any employer reimbursement during the 15-month period beginning with the first day of such calendar year for reasonable expenses incurred by the employee during such calendar year for the purchase of a bicycle and bicycle improvements, repair, and storage, if such bicycle is regularly used for travel between the employee’s residence and place of employment.

‘(ii) APPLICABLE ANNUAL LIMITATION- The term ‘applicable annual limitation’ means, with respect to any employee for any calendar year, the product of $20 multiplied by the number of qualified bicycle commuting months during such year.

‘(iii) QUALIFIED BICYCLE COMMUTING MONTH- The term ‘qualified bicycle commuting month’ means, with respect to any employee, any month during which such employee-
‘(I) regularly uses the bicycle for a substantial portion of the travel between the employee’s residence and place of employment, and

‘(II) does not receive any benefit described in subparagraph (A), (B), or © of paragraph (1).’.

(d) Constructive Receipt of Benefit- Paragraph (4) of section 132(f) is amended by inserting ‘(other than a qualified bicycle commuting reimbursement)’ after `qualified transportation fringe’.

(e) Effective Date- The amendments made by this section shall apply to taxable years beginning after December 31, 2008.”