Bike Commuter Benefit

It saves on gas money and vehicle-maintenance costs, and it helps reduce pollution. If you drive, fly, bus or bike for work, then you may qualify for tax deductions or reimbursements. The above pre-tax benefits have the same desirable effect on take-home income as the proposed Federal Bike Commuter Benefit. If the latter becomes law, you’d be able to mix and match them if you are an intermodal commuter. Employees who fail to comply with the terms and
conditions of the program and/or submit false certifications or claims for
reimbursement may be subject to agency disciplinary action up to and including
dismissal.

  1. In accordance with the 2017 Tax Cuts and Jobs Act, the non-taxable
    bicycle commuter benefit is suspended until 2026.
  2. To be eligible for reimbursement, employees must
    certify that they have complied with the Bicycle Reimbursement Program
    conditions, including certification that the minimum requirements on bicycle
    use are met.
  3. With our robust and specific geometry-designed dirt jumper and BMX bikes, you’ll go from ground to air and back again smoothly and safely.
  4. Unlike the e-bike credit, the bike commuter benefit is directed at every type of bike — including traditional bikes.
  5. $20 isn’t a fortune, but it’s small enough (in the eyes of the IRS) to be non-taxable.

You don’t qualify for this tax-free reimbursement if you use your bike for a week and drive or ride the train for the rest of the month. You have to use your bike as work transportation for a substantial portion of each month to qualify. There is a growing slice of the population these days choosing to ride bikes to work.

Tax Tips

This would salvage the climate-change measures that would seem to include the Federal Bike Commuter Benefit. Additional program information and guidance can be
obtained by contacting the program via email at

If you applied for the 2023 Bike Benefit please note that applications are still being reviewed and reimbursements will be distributed later this Spring. Once distribution timing is finalized you will recieve an email with details. Be sure to keep receipts, mileage logs, and any other documentation that can prove the costs you incurred while on the job. Official websites use .govA .gov website belongs to an official government organization in the United States. This could include vouchers exchangeable at participating bike shops for maintenance. It helps us to live a life that we can be happy with and proud of; so we want to share that and bring a healthy and joyful day-to-day routine.

May is National Bike Month and what better time to share ways biking and other transportation methods may save you money when you’re traveling for work. Phil Taylor of PT Money shares tips on how you can get some of your money back for work-related commuting expenses. A better approach would be to allow those who intend to commute by bike at least once a month to claim the benefit. This would leave less doubt for employers and employees to resolve. Bicycle Transportation reimbursement
for qualifying expenses are processed by the CGFS/EX Budget Office.

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“It’s good news because it’s a bad project,” said one activist about the feds’ rejection of funds to repair the Brooklyn-Queens Expressway. Bike commuting makes so much sense as a way of helping with urgent environmental and health issues. Even without a pandemic, shifting demographics demand healthcare reforms across the world. President Biden still hopes to pass parts of the $1.85 trillion bill into law by offering a pared-down version of it.

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And not just the daily grind, but work-related conferences, business trips, and a long list of other work-related travel. All of this travel has one thing in common…it all cost money. If you do use your own bike to commute, any maintenance expense is likely to be covered by the benefit. That could mean mechanical repairs by your local bike shop or replacement of consumable parts like tires and chains. Automatic membership of a bike-share scheme is one way the benefit may come from employers. This is a question that is yet to be answered, except to say you must be a “regular” bike commuter.

What happens if my bicycle is stolen from state property?

But if other goals are more important to your organization than the tax deduction, consider providing bicycle benefits that differ from or exceed those that would have been excludable. For example, reimbursements for bicycle-sharing program rental fees aren’t considered qualified bicycle commuting reimbursements and aren’t deductible, but they may be an attractive employee benefit and help encourage more employees to bike to work. Before 2018, qualified bicycle commuting expense reimbursements could be excluded from employees’ income and deducted by the employer. The exclusion applied to reasonable expenses incurred for the purchase, improvement, repair or storage of a bicycle regularly used for travel between home and work. The bike commuter benefit is structured as an income tax exclusion for employer-provided bike benefits.

This benefit operates on the calendar year; your total reimbursement amount accrues over the calendar year and is paid back to you against the total eligible expenses you incurred in the same year. Reimbursement claims are processed and paid in the spring of the following year. If you are a new employee/postdoc or use a parking permit or transit pass through Harvard for some months of the year, your total reimbursement value is prorated based on your eligible months. Many employers operate in locations where employees can bike to work. If you have employees who do so, you might wonder whether you can still reimburse bicycle commuting expenses as a fringe benefit, given the tax law changes in recent years.

As a result, if employees receive bicycle benefits prior to 2026, those benefits will need to be treated as taxable compensation unless Congress restores the exclusion. If your company does not need to maximize its tax deduction, you might consider providing bicycle benefits that are different from or exceed those that would have been excludable. For example, reimbursements for bicycle-sharing program rental fees are not considered qualified https://turbo-tax.org/s and thus are not deductible. If maximizing the company’s deduction is essential, your company might decide to limit benefits to those that would have been excludable before the suspension. After the suspension ends in 2026, no deduction will be available for bicycle commuting benefits (subject to the safety exception), so your company will then have no tax reason to limit bicycle benefits to reimbursements that were excludable prior to 2018. So, if maximizing the deduction is essential, you might want to limit bicycle benefits to those that would have been excludable before the suspension.

In fact, you wouldn’t even need to own a bike to claim the proposed benefit. Special rules allow an employee to exclude certain achievement awards from their wages if the awards are tangible personal property. An employer also may deduct awards that are tangible personal property, subject to certain deduction limits. Perhaps the one that crosses your mind right now is that first scar that you got while riding on a bike!

Office buildings must provide ample car parking for their employees, which takes up lots of space that could be used for other things, including housing. It also leads to immense sprawl, which hits people of limited means and transportation budgets hardest. A substantial shift towards bike commuting would have substantial benefits for society — even those who aren’t eligible for the credit itself. The Federal Bike Commuter Benefit is part of President Biden’s “Build Back Better” Bill, the fate of which is yet unknown as of January 2022. The benefit would allow employers to offer employees up to $81 in pre-tax bike commuting benefits per month.

The good news is, there’s a chance to get some of that money back – in the form of work-related commuting deductions and reimbursements from Uncle Sam. In the fight to keep more of your money in your bank account, it’s always important to stay informed about available tax deductions. A third possibility is a combination of a subsidized $81 benefit funded partly by the employer and partly by the employee’s pre-tax compensation. Bear in mind that employers also gain from the benefit by a reduction in payroll tax. If such motor only provides such assistance when the rider is pedaling, does not provide such assistance if the bicycle is moving in excess of 28 miles per hour. Many different people choose many different means of transportation for work each day.

The tax deduction consequences for an employer providing bicycle benefits are a little more complicated. As a result, if an employer provides bicycle benefits during the suspension period (prior to 2026), the employer can still take a deduction for its expense up to the amount it pays or incurs to provide qualified bicycle commuting reimbursements. However, any bicycle benefits that do not meet the Code’s definition of a qualified bicycle commuting reimbursement will not be deductible during the suspension.

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