Benefits for Bicycle Riders

July 23, 2012 — 1 Comment

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The Tour de France is over and Bradley Wiggins is victorious.  Wiggins, who is a member of team Sky is first British rider to win the Tour.  Hip Hip Hooray for Bradley Wiggins!

Not very many people have a job of riding a bike for miles and miles over mountains in bad weather, but a lot of folks do use their two-wheelers to get to their jobs.

While they’re not likely won’t receive the same accolades as those bestowed each July in Paris, these two-wheel aficionados might be eligible for up to $20 per month tax-free from their employers.

The biggest mountain to climb on this tax-free benefit course is your employer. Not every company offers the biking benefit.

This is a benefit that your boss covers totally. There’s no contribution component by employees. So your company could be out $240 a year for each employee that meets the biking requirements for all 12 months.

If your employer doesn’t cover commuting via pedal power, it is worth talking with him or her about the possibility of adding it to the firm’s benefits package.

A key selling point to use is that bicycling is a great way to stay in shape and healthier employees are obviously a good thing for any workplace. A recent Gallup Poll found that unhealthy and chronically ill workers cost businesses more than $153 billion annually in lost productivity.

So $240 per worker each year for just a few bicyclers — let’s face it, most folks will still get to the office by car — is a cost-effective way to help keep workers at their desks and in good spirits.

OK, you won! Your company has signed up for the bicycle commuting benefit. Just how does it work?

The business can pay any employee who meets the bicycling commuting standards up to $20 a month as a de minimis reimbursement. The Latin means that it’s such a negligible amount that tracking it would be more trouble than it’s worth. Essentially, it’s the tax law way of saying that this money is not taxable to you, the bicycle commuting worker.

What do you have to do to get this tax-free twenty bucks?

First, you must complete a qualified bicycle commuting month. That means you regularly use the bicycle for a substantial portion of the travel (generally three of five workdays each week) between your home and your job while also not receiving any other commuter benefits.

Your bicycle-related expenses also count. This includes the cost of purchasing a bicycle, making improvements to or repairing the bike, as well as storing it. All of these things are considered reasonable expenses as long as the owner regularly rides said bike to work.

I can imagine the thoughts biking across your mind right now.  Biking to work is less expensive than driving or even taking a bus or train, but a paltry $240 maximum is nowhere near what it costs to keep your bike in top commuting shape.

And it does seem especially chintzy when you consider the amounts employers provide for vehicular commuting costs. For the 2012 tax year, the limits are:

  • $125 per employee per month for public transportation (van pool, bus, ferry, rail, etc.)
  • $240 per employee per month for qualified parking
  • $365 per month per employee for both public transportation and qualified parking.

That’s right. This year one month of parking benefits is the same as a year of biking to work.But if you are using your bicycle to get to work, you should at least get something. So talk with your boss about the benefit.  And talk with your Senators and Representatives about making the workplace commuting benefits more fair for every transportation choice.

JDKatz, P.C. is a full-service law firm focused on tax law and estate planning. We are dedicated to minimizing your existing liability and risks while providing valuable tax planning to streamline your tax issues in the future. Please call us at 301-913-2948 to schedule an appointment to meet with one of our trusted attorneys.

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