When Congress returned with an amended $700 billion bailout plan, the new version included several perks and goodies aimed at promoting alternative and “green” energy at the individual level, among them a reimbursement package for bike commuters.
Beginning Jan. 1, employees who regularly commute between their home and work can claim a monthly $20 credit from employers for general maintenance of the bike, storage, improvements, or to purchase a new bike. Or commuters could credit that payout toward fuel.
Consider: If the average bike commuter can get 25 MPB (Miles Per Burrito) and if a burrito costs $5 (a veggie at Tonita’s is only $3.50) then cyclists can fuel-up with a burrito at least once a week, and travel 100 miles or more each week by bike, paid through their boss, but courtesy of taxpayers.
The payout comes once a year, for the total of every month an employee commutes. Basically, a bike commuter is eligible for $240 a year just for riding a bike to work, not to mention money saved on parking.
Here are some frequently asked questions, and answers, about the plan, as posted on the website of the League of American Bicyclists:
Q: I am a bicycle commuter: How and where do I apply?
A: The bicycle commuter provision is a fringe benefit, so your employer will still have to set up a process to administer the benefit that works for your organization. The League of American Bicyclists is taking the lead to obtain guidance from Internal Revenue Service that employers can use to set up their programs.
Q: How does the program work?
A: The original intent was that an employer could now provide up to $20 a month in incentives related to an employee’s bike commuting, to include, but not limited to, bike parking facilities, shower facilities, and maintenance, then deduct that amount from their taxable income. Again, we will work with IRS to establish more guidance for interested employers.
Q: Why was the Bicycle Commuter Act part of the financial rescue package?
A: The Bicycle Commuter Act has been in front of Congress for seven years ; The bike provision was part of a larger Renewable Energy Tax Credit Initiatives legislation. Varying versions had passed both the House and Senate but the two houses were unable to compromise on one version. The Senate strategically attached a number of provisions to the Financial Rescue Package to ensure their passage before recess.