During the crazy month that we’ve had with news of banks and bailouts, a piece of legislation was slipped into the bill that encourages employers who provide benefits reimbursing employees for their use of public transportation to also include bicycle commuting expenses as part of their benefit package. Since the legislation tagged this benefit on, and because many companies hire a benefits administrator service, employees may begin seeing this included in their benefits in the near future.

I just want to say, if it helps with the motivation to cycle to work, more power to everyone who pulls their bike out of the garage as a result. In the past three months, I’ve saved 936 pounds of carbon from gasoline emissions, and I’m proud of that. My employer doesn’t have to pay federal taxes, so I won’t be seeing any reimbursement of my related expenses unless the wellness committee talks them into it. But the idea that people are being given this incentive is a positive step, even if it is a small one in terms of economics.

One of the contributers to bikeforums.com provided the following sample letter to his HR department to request that they consider supporting this addition to the tax code…

Human Resources Department,

As I’m sure you are aware, the Congress just passed H.R. 1424 “The Bail-Out Bill” on Capitol Hill. Although this legislation deals primarily with the housing market, there were several other unrelated provisions added to the bill. Among these was a tax incentive for employers who promote the use of bicycles for commuting. The specifics of this tax break are laid out in Sec. 211, “Transportation
fringe benefit to bicycle commuters” under the Transportation and Domestic Fuel Security Provision section but the change is pretty basic. The bill offers a $20 a month tax relief per bicycle commuting employee to cover the cost of any employer reimbursement for reasonable expenses incurred by the employee “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.”

I am interested in finding a way that [Company Name] could implement a program that would allow employees who cyclo-commute to expense less than $20 a month in bike related expenses.

The benefits of an expense reimbursement program for cyclo-commuters include:
• Lower fuel costs on company owned vehicles
• Less required maintenance on company owned vehicles
• Ability of [Company Name] to claim a full $20 per month per eligible employee
when actual expenses are likely to be far less
• Improved employee health which in turn increases employee productivity
• Creates a progressive and environmentally conscious image for the
company

Please let me know if you have any questions or would like additional information about this recent tax code change.