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BIKE TO WORK BOOK
ONE CUP OF COFFEE A WEEK Is the $20-a-month Bicycle Commuter Tax Reimbursement worth the HR hassle?
W
hile the UK has the Cycle to Work scheme which can nearly half the price of a bike and equipment, the US has the Bicycle Commuter Tax Reimbursement. This is a $20 a month tax credit, one of the qualified transportation benefits (QTFs) covered in section 132 (f) of the Internal Revenue Service Code. It has been in existence since January 2009 but hasn’t set the world alight. In short, for the cycle commuter, it’s almost more trouble than it’s worth unless the employer is already up and running with the scheme. The tax credit was introduced in the Bicycle Commuter Act, hastily tagged on to President Obama’s $700 billion federal credit crisis bailout (although it had been in front of Congress for seven years previously). The money credited to cyclists is deducted from a company’s corporate tax bill. The paperwork is handled by a company’s HR department although, similar to the UK, is often farmed out to a third-party facilitator. While cyclists can claim $20 a month, users of public transmit can claim $115 and motorists can claim a $115 parking credit each month. Cyclists who commute by bike and bus/train tend to opt for the $115 credit: there’s no claiming for both. A sequel to the Bicycle Commuter Act - which should tidy up some of the loose ends – has been proposed but has yet to be passed. The Multimodal Commuter Transport Act, also know as House Bill 863, would allow commuters who go by both bike and public transit to get up to $115 a month. It would also allow employers to administer the credit the same way existing fringe benefits are administered, allowing employees to fund the bike provision through a pre-tax income, clearing up much of the HR confusion. To qualify for the $20 credit, cyclists need to ride to work for a “qualified bicycle commuting month”. This is any month in which an employee regularly uses a bicycle for a substantial portion of the travel between home and place of employment, and does not receive any other qualified transportation benefits such as transit, or parking. Sole proprietors, partners, independent contractors and two-percent shareholders of S corporations are not eligible for this transportation fringe benefit. The League of American Bicyclists offers this advice to those bike commuters who want to start getting the $20 a month: “Talk to your employer and tell them you want this benefit. If there are other bike commuters in your office, tell them to speak up too! “Many employers contract with a Commuter Benefit Provider to coordinate their commuter programs, so have your benefit coordinator call the provider to request enrollment in the bike benefit program.” The main US provider of transportation benefits commuter solutions is Accor Services, which provides Commuter Check for Bicycling vouchers. Employers purchase these vouchers just as they do standard Commuter Check vouchers. Employees can take the vouchers they receive to any dedicated bicycle shop or bicycle parking or storage location to redeem their value. If an employer prefers to manage the qualified transportation benefits in-house, a cash reimbursement program has to be created. www.bikeleague.org