As of January 1, bike commuters can spend $20 per month tax-free.
That’s $240 per year of pre-tax dollars that bike commuters can spend on bikes and accessories. It results from an expansion of an IRS rule that has allowed a tax deduction for users of public transit and car pools. Nor bicycle commuters are covered too.
An employee qualifies for the monthly benefit if he “regularly uses the bicycle for a substantial portion of the travel” between home and work during the month.
Here’s how it works: The employer buys $20 vouchers from the authorized provider, Commuter Check Services (
www.commutercheck.com) and issues them to employees in lieu of pay. The employee “spends” the voucher in a bike shop, which treats the voucher like a traveler’s check. depositing it with its bank.
The vouchers are backed by Bank of America and have safety features like a watermark and hologram. There are no costs or service charges to redeem the vouchers.
Commuter Check Services has provided public transit vouchers for over 18 years for over 10,000 employers nationwide. It’s only the extension to bicycle commuters that is new.
Instructions for employers and for cashiers redeeming the vouchers are available from Commuter Check Services, or by calling Stuart Baker there at (510) 649-1061. For more information go to the League American Bicyclists website:
www.bikeleague.org/news/10078faq.php
There’s also a cash reimbursement option. Employers can give their workers cash instead of vouchers provided workers keep receipts for their cycling purchases.
One caution: Bike shops can accept only vouchers labeled “Bicycle”. Those labeled “Transit” cannot be redeemed in a bike shop.