BRO submission by Christian Schmidt of Green Options Buffalo:
Now that it has passed, the question is how does the “Bicycle Commuter Tax Act” affect me as an employer or employee on a daily basis.
During a time where healthy, environmentally sustainable and community friendly transportation options are more and more looked at as an effective way to encourage energy efficiency, to improve public health, to prevent congestion, to eliminate greenhouse gas emissions and to improve community livability and safety, this is an essential step for encouraging bicycle use.
Beginning on January 1, 2009 employers will be able to use $20 a month or $240 a year to provide bicycle commuting to and from work as well as other related services to all its employees. The Bicycle Commuter Tax Act will enable businesses as well as industries in the private, public and non-profit sectors to help pay for things such as a commuter bicycle, a bike lock, a helmet, bicycle maintenance and shower facilities. The amount of money used to provide such amenities can then be deducted from the taxable income of the employer offering these benefits.
According to an article in the American Bicyclist Magazine (September/October 2008) both “employees and employers save all income and payroll taxes on the amount provided for qualified transportation fringe benefits for commuting.” As far as this most recent bicycle act is concerned the full amount of benefits can be used exclusively for commuting on two wheels (motorcycles excluded). The savings that can be expected are mainly due to tax savings. Employees in particular will be able to save in their annual commuting costs, while employers save on Federal and State income taxes, Social Security taxes paid for by both as well as unemployment, disability, workman compensation and retirement costs driven by salary.
Many may still be wondering why an employer would make these transportation benefits available to them. Simply put, Qualified Transportation Benefits such as this tax act will be an asset to employers sensitive to tax savings as well as employee moral, improved recruitment, reduced turnover and in the long run it will eventually keep the employer’s benefits package competitive. In addition to reduced FICA (Federal Insurance Contribution Act) and payroll related costs, the Bicycle Commuter Tax Act provides a special opportunity for all of us to play an active role in saving our environment. In addition, we can all capitalize on the numerous benefits of bicycle commuting including reduced stress from not driving, increased job satisfaction, improved on-time arrival and enhanced productivity. From the public health standpoint it provides an easy opportunity to be physically active on a daily basis, which will promote health and well-being as well as reducing health care costs.
If you are an employer this is an excellent opportunity for you to take advantage of. As an employee, you can share this information with your employer and encourage them to participate. Additional information can be found here: www.bikeleague.org.
Article Reference: Kiker, Elizabeth (September/October 2008). Bicycle Commuter Act Passes Congress! American Bicyclist, 12 - 15.