Rejoice! If you are a bicycle commuter for a substantial part of your monthly commute, your employer may now provide an up to $20 tax free reimbursement for costs related to your commute — the Transportation Fringe Benefit to Bicycle Commuters was passed as a part of the bailout package. When you think about it, that has to be a lot cheaper than giving you free parking, especially downtown, so it’s in their interest to provide it.
Obviously, this is mostly symbolic, but it certainly a nice thing to do from a policy standpoint, allowing a tax benefit for people trying to encourage healthier behavior that decreases traffic and pollution. Kudos to Oregon Representative Earl Blumenauer for his work in finally getting this passed after multiple previous attempts for initially introducing and promoting this idea, though he ultimately voted against the overall bailout plan as noted in this NYT article.
The benefit — up to $20 per month — begins with the new year in 2009. Employers may reimburse employees, tax free, for “reasonable” expenses related to their bike commute, including equipment purchases, bike purchases, repairs, and storage if the bicycle is used as a “substantial part” of the commuter’s trip to work for the month. If you already receive another commuter tax-free fringe benefit, you don’t qualify, so multimodal commuters are out of luck.