Tucked in among the hundreds of pages in the federal bill bailing out financial institutions are a few dedicated to people who commute to work on two wheels.
Bicycle commuters are eligible for a $20-a-month tax-free reimbursement from their employers to pay for bike-related expenses, thanks to the Economic Stabilization Act of 2008.
“It legitimizes bicycle commuting right up there with transit and driving your car to work,” said Gary MacFadden, senior program director for the National Center for Bicycling & Walking.
In most cases it’s likely going to be up to employees to ask their bosses about the reimbursement, MacFadden said.
Employers will determine what constitutes “regular” bicycle commuting and they have a couple of options in setting up the voluntary program.
The $20 could be a pre-tax benefit that shows up on a worker’s paycheck, or an employer could pay the bike commuter $20 and take that expense off federal taxes, MacFadden said.
Essentially, businesses won’t be taxed on that $20, he said.
“I think there is some disappointment from the people who were pushing this bill that it came down to $20 per month,” MacFadden said. “In the future we’d like to see this adopted more around the country and a push for a higher benefit program.”
Benefits already are available for commuters who use mass transit or who pay for parking, at $115 and $210 per month, respectively.
The yearly cost of the Bicycle Commuter Act is expected to be about $1 million, according to the House-Senate Joint Committee on Taxation.
Some groups are critical of the program.
Tax credits aren’t the right way to go about making policy, said Pete Sepp of the National Taxpayers Union. The emphasis should be on reducing tax rates, he said.
“It’s hard to envision such a thing suddenly inducing millions of people getting on bicycles and pedaling to work,” Sepp said. “This is more of a reward for people who are already riding.”
Some bicyclists say more incentive must go to employers to provide showers for bike commuters.