Tax Break for Bike Commuters?

[DricaDeJerk]

Just got back into the country after 3 months away and heard a rumor this is in effect retroactively for the 2009 tax year... anybody have any more information confirming or denying this? Or any tips on how to utilize it, if it does exist? Thanks!

[Haven_kd7yct]

Here's something I posted in another section here. I have not heard of a tax break for bicycle commuters beyond this:

"I'm not an accountant, but I work in the payroll industry with accountants, and I am familiar with the bike tax credit.

Here's what I know, in a nutshell:

The Qualified bicycling commuting reimbursement (aka bike commuting credit) is essentially a qualified transportation fringe benefit available to employers, much like paying for parking, transit passes, or vanpool.

It is not a credit an individual can take on a tax return.

It is $20 per month-- per IRS publication 15B for 2010: "For any calendar year, the exclusion for qualified bicycle commuting reimbursement includes any employer reimbursement during the 15-month period beginning with the first day of the calendar year for reasonable expenses incurred by the employee during the calendar year.

"Reasonable expenses include:
-- The purchase of a bicycle and
-- Bicycle improvements, repair, and storage.

"These are considered reasonable expenses as long as the bicycle is regularly used for travel between the employee's residence and place of employment."

The $20 per qualified bicycle commuting month is excluded from wages (it is given to employee outside of payroll).

S-corporation owners cannot take advantage of the qualified transportation benefits. Employers may not combine the bicycle commuting reimbursement with any other qualified transportation fringe benefit.

Hope this helps; for more info, read through pages 19 and 20 of IRS publication 15B, available free on the IRS website at www.irs.gov."

I'll poke around and see if I can find anything about this rumored tax credit and will post back here on my findings.

[Haven_kd7yct]

Update: From the IRS website, click "Individuals", click "Highlights of recent tax changes", click "individuals", scroll down and click on "qualified transportation fringe benefits" and you'll find this:

"Qualified Transportation Fringe Benefits


Beginning January 1, 2009, the monthly exclusion for commuter highway vehicle transportation and transit passes increased to $120 and the monthly exclusion for qualified parking increased to $230. Beginning March 1, 2009, the monthly exclusion for commuter highway vehicle transportation and transit passes increased to $230.

Beginning January 1, 2009, you may be reimbursed for reasonable expenses of qualified bicycle commuting. Reasonable expenses include the purchase of a bicycle and bicycle improvements, repair, and storage. The exclusion for a calendar year is $20 multiplied by the number of qualified bicycle commuting months during that year. A qualified bicycle commuting month is any month you use the bicycle regularly for a substantial portion of the travel between your residence and place of employment and you do not receive any of the other qualified transportation fringe benefits. You are not entitled to this exclusion if the reimbursement for bicycle commuting is made under a compensation reduction agreement."

Note that this is essentially the same language used in publ 15B for employers. I wish they could have made it more clear that this is a fringe benefit offered by employers to workers, but oh well.