Do you bike to work? You are eligible for a tax benefit. But obtaining it takes some work.
Beginning this past January (2009), bicycle commuters "can" get a tax benefit of $20 per month for their pedaling. I use the quotes because securing the benefit takes some work. Even though the bill passed over eight months ago, there is still confusion and frustration about how to best implement the program.
To help our bicycle commuting friends, we've outlined the key issues and linked to two very helpful resources. Additionally, there may be some good news on the horizon--a doubling of the benefit to $40/month!
Cheers to Meredith Corporation for being one of the only companies we came across with a bicycle commuter program in place! Meredith's program took effect July 1, 2009.
The League of American Bicyclists provides a FAQ and links to other helpful materials. Check it out here.
How it Currently Works
First, your employer must give you the benefit. Companies can give employees the credit in pre-tax dollars and then deduct the expense from their federal returns.
Second, your employer must have a "commuter benefits program". A what??? It's part of the tax code called "Transportation (Commuting) Benefits", Section 132 of the IRS Publication 15-B 2009. Many BIG companies contract out transportation benefit processing to other firms who then issue checks that are accepted by various municipal transit agencies. As of April 2009 only Accor Services offers the bike benefit. Meredith Corp's program is cash based.
Third, the money can ONLY be used toward a new bike, repairs, storage, bicycle parking etc. The expense must be incurred BEFORE payment.
Fourth, you can't receive this benefit if you are already receiving the transit benefit.
Fifth, if you are a small business owner organized as an S-corp, you are NOT eligible.
The GOOD NEWS? The credit may double to $40 per month. A new bill is in the works.