Author Topic: IRS qualified bicycle commuting reimbursement  (Read 3357 times)

Nothlit

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IRS qualified bicycle commuting reimbursement
« on: November 14, 2013, 02:48:08 PM »
Does anyone here work for an employer that offers a tax-exempt bicycle commuting reimbursement, as allowed by the IRS?

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Qualified bicycle commuting reimbursement.   For any calendar year, the exclusion for qualified bicycle commuting reimbursement includes any employer reimbursement during the 15-month period beginning with the first day of the calendar year for reasonable expenses incurred by the employee during the calendar year.

Reasonable expenses include:
  • The purchase of a bicycle, and
  • Bicycle improvements, repair, and storage.
These are considered reasonable expenses as long as the bicycle is regularly used for travel between the employee's residence and place of employment.

My employer offers pre-tax vanpool, public transit, and parking benefits, but not a bicycle benefit. I assume it's some combination of 1) not enough demand from the employees, and 2) the bicycle benefit in particular, unlike the others I just mentioned, cannot be offered "in place of pay" (i.e., through a salary reduction agreement) so any money the employer pays toward this benefit, while exempt from taxation, would have to be above and beyond the employee's normal salary. Of course, it is capped at $20/month or $240/year so it would not be a huge additional expense.

Just wondering if others out there use this benefit and/or have successfully petitioned their employer to offer it?

jfer_rose

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Re: IRS qualified bicycle commuting reimbursement
« Reply #1 on: November 14, 2013, 02:55:56 PM »
I used to work for an employer that offered this. Unfortunately my current employer does not.

It is one of the policies that helps employers become one of the League of American Bicyclists "Bicycle Friendly Businesses": https://www.bikeleague.org/bfa

the fixer

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Re: IRS qualified bicycle commuting reimbursement
« Reply #2 on: November 14, 2013, 03:53:35 PM »
The federal government is the only employer I've seen that offers this.

clutchy

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Re: IRS qualified bicycle commuting reimbursement
« Reply #3 on: November 15, 2013, 10:20:57 AM »
there's a large private hospital/university in my area that offers this.

I think they have pretty decent participation.

capital

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Re: IRS qualified bicycle commuting reimbursement
« Reply #4 on: November 15, 2013, 06:45:39 PM »
I did once. It was nice, though not amazing or anything-- it just provided funding for a few random bike parts at the couple bike shops that actually took the vouchers. The fact that's it's just free money for employees, rather than a pre-tax deduction, makes folks less-than-eager to use it.

mpbaker22

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Re: IRS qualified bicycle commuting reimbursement
« Reply #5 on: December 10, 2013, 12:24:50 PM »
I just found the same thing where they reimburse van-pool, public transit, and parking costs, but not bicycle costs.  I actually looked into it this morning because I got a memo about alternative commuting.  The memo had this on the sidebar (Itatlics where I removed employer's name):
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Paying too much to drive to work alone?

Probably. Here's an estimated look at average costs per year, according to the Employer's Commuting website.

Driving to work in a single-occupancy vehicle:

    Average workdays per month: 22
    Average miles per trip: 20 (32 kilometers)
    Estimated cost per mile: Nearly 60 cents
    Estimated annual cost: $3,000 per year

Now compare those numbers to the cost of alternate means of getting to work:

    Carpool (one passenger): $1,500 per year
    Vanpool (with six passengers): $651 per year
    Bicycling/walking to work: $0 per year (or a $3,000 per year savings)

I actually emailed back to point out how ridiculous it is  to assume that bicycling to work costs $0/year.  With the car costs, they assume a mid-range new car with maintenance done at the shop.  With a bicycle they assume $0/year.  I provided estimates of what a similar quality new bike, with routine maintenance would cost.  I estimated the minimum would be $200-$300/year ($100 for the bicycle, $50 for tires/tubes, and $50-$150 for other parts).  Remember this estimate is based on the same assumptions used for car commuting (new car, maintenance at dealership, etc.).