Comments on: Commuter tax benefit

By: John Paul Hudson

John Paul Hudson — Mon, 05 Jan 2009 15:10:03 +0000

Texas Monday 01/05/2009 32 degrees and freezing rain. Saurday it was over 80 degrees what a nice ride home! MY H.R. person almost never returns his e-mail. I hope they act on the Bike Commuter act soon.

By: DOUG M

DOUG M — Mon, 05 Jan 2009 01:59:56 +0000

Happy New Year to all. I have biked to work for years now. It is about time the beaurcrats finally notice. It is just ashame the credit went from around $8o.00down to $20.00. They did that just so the bike commuter package would finally pass. As has been previoulsy said, What about all those other big breaks the vehicle people get? There is nothing better riding a bike for transportation. A wonder of things people miss every day by not riding a bike for any reason. Keep on Riding, Doug M

By: Fritz

Fritz — Tue, 23 Dec 2008 21:59:40 +0000

Looking forward to that, John Paul!

By: John Paul Hudson

John Paul Hudson — Sat, 20 Dec 2008 13:51:18 +0000

Merry Christmas Everyone Let’s all have a safe ride next Year. I hope we all get what we want next year Tax benefits. I hope I set a good example to our motoring friends. Get Out And Ride. I will write more on how my companys HR department deals with the Tax benefit. John Paul

By: Bike2Work

Bike2Work — Wed, 17 Dec 2008 08:20:51 +0000

The benefits of bicycle commuting are extinguished by the burden of non-detecting traffic signals and costly vehicle fines from police departments preying on bicyclists. An example is the city of Newport Beach in Southern California. Not being contiguous to a major freeway, Newport Beach is light traffic and family-oriented with car drivers being bicycle-friendly. But city engineers have set back a frequently-cycled left-turn signal to not detect bicyclists; police motorcycles chase bicycles to create pseudo-vehicle citations; and the police commanding officers classify bicycles as vehicles while advocating bicyclists to be pedestrians and use crosswalks. The scenario is city hall enabling the police department to prey on bicyclists for vehicle citation revenue. Both Newport Beach City Hall and the Newport Beach Police Department (NBPD) defy California state law AB-1581 that requires traffic-activated signals to detect bicycles upon first placement or replacement.

By: Fritz

Fritz — Mon, 13 Oct 2008 16:33:23 +0000

I really need to get that FAQ about this up…

Nathan, you’re mostly spot on. A couple of minor points:

1. The cafeteria plans are regulated under IRC Section 125, while the transportation benefits (transit, parking and — soon — bikes) are under 132. This means no paperwork and no oversight unlike Section 125 benefits, and there’s no “use it or lose it” provision.

2. Employers may elect to take this from the paycheck or provide it on top of the regular salary as an additional fringe benefit. Every employer I’ve had that provides Section 132 benefits does it as an an additional benefit.

By: Nathan Broom

Nathan Broom — Mon, 13 Oct 2008 16:25:39 +0000

I’m still trying to get to the bottom of this, but I think the bottom line is this: the new law amends IRS code (section 132f) to let employers allow their employees to set aside up to $20 of their pay monthly for qualified reimbursement of bike commuting expenses. Think of it like a Health Savings Account for bike commuting. I don’t believe there is any federal reimbursement to either the employer or employee for the $20. The impact of this is that if you and your employer are both willing to go through the trouble of a reimbursement plan, you can avoid paying income tax (and I believe the employer can avoid payroll tax) on up to $240 per year, if you bike commute regularly every month. A generous employer could presumably give cyclists an extra $20/month tax free, in the same way some employers contribute to an HSA on behalf of employees.

It’s a nice gesture, but I don’t expect it will benefit many bike commuters. Here’s a link to a benefits consulting company that provides information to employers who want to offer the benefit to employees. http://www.coredocuments.com/core132.php

The new provision amends current language that allows employers to offer pre-tax reimbursement for public transit ($115/month) and qualified parking ($220/month) expenses. Employers who are already offering this benefit should find it pretty easy, come 2009, to add the bike commuting benefit. But bike commuters who are currently receiving pre-tax reimbursement for transit passes will have to decide between transit and bike reimbursement.

That’s how I understand this so far, though I’m still looking into it.

By: John Paul Hudson

John Paul Hudson — Fri, 10 Oct 2008 20:11:16 +0000

Thank You Nathan Broom! Now how to make your boss and prsonel department think it was there idea?

By: Nathan Broom

Nathan Broom — Fri, 10 Oct 2008 19:53:23 +0000

Here’s a link to some more information about the credit. Looks like it will become applicable January 1, 2009. http://blog.centurycycles.com/2008/10/tax-breaks-for-bicycle-commuters-added.html

By: John Paul Hudson

John Paul Hudson — Fri, 10 Oct 2008 10:53:02 +0000

I am sorry about my 40% loss of investments and retirement 401k. The passing of the Bike Bill is the only little bit light I can cling to. Wall Street is so far from my bike route, but the effects of this boondoggle will be felt for years. Resession Depression “Fear of fear it self”. I know one thing a good indian summer bike ride to work really makes me feel much better.
Please could some one experenced with the company tax benefits tell us what we need to do and what questions too ask. Many of us emoploys don’t know how to get in on this tax break. I have modified one Bicycle and purchased another commuter specific bike for riding to work this year. I am sure H&R block won’t know how to make this happen.