yes, a tax break for bicycle commuters



yes, a tax break for bicycle commuters

Given that it was a relatively small addendum to last month’s $700 billion Wall St bailout bill, it may have escaped the notice of some that our United States now enables employers to provide a tax benefit to those who commute by bike, similar to that which is available for those who commute on public transit.  Talk to your HR person about this.  The upshot is that this law enables bike commuters to receive a tax-free reimbursement of up to $20/month from their employer.  The employer can then deduct that amount from their federal taxes.

(incidentally, one of the rumors I’ve read is that Obama may tap Rep. Blumenauer to be Transportation secretary.  Can you imagine?)

Here’s how the NY Times described it on October 10:

Bicycle Commuter Tax Break Is a Bittersweet Victory for Measure’s Sponsor


Published: October 9, 2008

PORTLAND, Ore. — People who pedal to work each day have long sought a kind of commuter equality: a federal tax break for biking similar to those given for parking or riding public transit. Last week, after years of rejection, the credit suddenly became law.

Brendan Hoffman/Getty Images

Representative Earl Blumenauer founded the Congressional Bike Caucus.

Scheduled to take effect in January, the credit was among a range of energy and tax provisions quickly added to the $700 billion financial rescue.

Yet here in the district of the congressman who first pushed for the bicycle bill, Representative Earl Blumenauer, a Democrat who wears a bicycle lapel pin and founded the Congressional Bike Caucus, no party is being planned.

“Who wants to celebrate?” said Jonathan Maus, who edits a blog that promotes cycling here in Portland. “Because I think a lot of people agree with how Blumenauer voted.”

Even with his cycling tax credit attached to the financial rescue bill, Mr. Blumenauer voted against the measure. After all, thousands of constituents had contacted his office to oppose the $700 billion rescue bill and he was frustrated that it did not do more to help individual homeowners, according to an aide.

“He was looking at the big picture, the state of the economy,” said Lucia Graves, a spokeswoman for the congressman. “If anything it was a diversion,” she said of the cycling tax credit. “It’s great that it was on there, but it was not the point.”

Come January, bike commuters will receive a monthly credit of up to $20 that can be spent on maintaining, repairing or buying bicycles.

Employers, many of whom have long provided tax-free parking and transit benefits, will establish how they administer the cycling tax credit, Ms. Graves said. Employers will be able to deduct the credit from their corporate taxes.

“The idea was to level the playing field for cyclists,” she said.

Portland has a higher percentage of people who bike to work than any other American city, according to the Census Bureau.

In the past year, bicycle traffic on the main bridges over the Willamette River into downtown rose to about 18,000 from about 14,000 last year, according to Mr. Maus.

Nationwide, many bike enthusiasts have praised the new tax credit, even some frustrated that it was part of the rescue bill.

“It’s a totally weird, ironic political situation,” Mr. Maus said. “It’s a pretty small victory. But this gives a lot of people around the country the ability to walk into their human resources office or their manager’s office and ask for the credit. It helps move the conversation forward.”


  • Nov 14, 2008 at 9:49 am

    I had not heard the rumors about Rep. Blumenauer potentially being tapped for Transportation secretary. That would be great! I'm sure it wouldn't change all of our woes, but it might help give alternative transportation a stronger voice in the government.

  • Barry
    Nov 14, 2008 at 10:24 am

    It might be better if he remained a powerful ally in Congress, which is also a long-term proposition instead of a cabinet post that might be just for 4 years.

    Its especially important to have friends in the upcoming Congress that will be rewriting the Federal 6-year transportation program.

  • Nov 20, 2008 at 1:16 pm

    Shriram, my understanding is that any employer can put this in place. I suggest contacting your HR rep and asking him/her to set this up. If they don't know what you're talking about, you can just refer them to this article!