Bike to work? The $20 per month tax benefit provided by employers may not be available this year. Here’s why.
It wasn’t much, but for nearly a decade the Bicycle Commuter Benefit gave people a reason to spend a little extra time in the saddle. More importantly, it gave employers a reason to encourage their workers to bike to the office.
As we reported, the Renewable Energy Tax Credit passed in 2008 held a provision allowing bicycle commuters to receive $20 for every month they rode to work. That meant most employees were eligible for $240, tax free, every year. It covered “reasonable expenses” like bike locks, helmets, repairs, and almost anything else bike related.
But that changed in December when President Trump signed a massive tax overhaul reducing the corporate tax rate. Among its changes, the tax bill did away with smaller write-offs employers could claim, like the bicycle benefit.
The result is that while employees remain eligible, employers no longer have a financial incentive to provide the benefit.
Bicycle Commuter Benefit: 2018 Tax Code
Many cycling advocacy groups were perplexed by the tax plan’s scrapping of the commuter benefit. According to The League of American Bicyclists, the benefit cost the federal government about $5 million annually. By comparison, some estimates put the expected reduction in overall tax revenue at $1.5 trillion over the next 10 years.
So what should commuters do? Following the drafts of the tax bill, The League of American Bicyclists urged commuters to submit all reimbursement requests as soon as possible. And while the bill became law on Jan. 1, some employers are allowing workers to submit requests up until tax day.
Harvard University, for example, said its tax professionals are reviewing the legislation, and it will accept reimbursement requests until March 31. According to the university’s campus transit website, the school remains “committed to distributing these reimbursements to everyone who applies to receive them, albeit with a delay while we wait for the analysis to be completed.”
Unfortunately, it’s unclear which employers, if any, will choose to continue to provide the commuter benefit. But it’s worth asking your employer what their plan is and if they will continue to support bicycle commuting.