Bicycle Commuter Benefit

Beginning in 2009, the federal government recognizes bicycling as a commute option. Employers may reimburse bicycle commuters up to $20 per month tax free for each month a bicycle is used for transportation between the employee's home and place of employment.

Reimbursement may be for reasonable expenses incurred for the purchase of a bicycle, bicycle improvements, repair and storage. Bike commuters who receive any other transportation fringe benefit under IRS Section 132 are not eligible to receive the bike commuter benefit.

How it Works

Incentive Levels: Up to $20 per qualified bicycle commuting month. This 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.

Employer Benefit: 9.5% of FICA contribution per employee

Employee Tax Benefit: Employee reimbursed up to $20/month for reasonable expenses related to commuting by bicycle.

Definitions

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 following as long as the bicycle is regularly used for travel between the employee's residence and place of employment:
  • The purchase of a bicycle
  • Bicycle improvements, repair, and storage
Qualified Bicycle Commuting Month
For any employee, a qualified bicycle commuting month is any month the employee: regularly uses the bicycle for a substantial portion of the travel between the employee's residence and place of employment and does not receive:
  • Transportation in a commuter highway vehicle
  • Any transit pass, OR
  • Qualified parking benefits
Bicycle Commuting Benefit and Compensation Reduction  
According to the IRS, "Generally, you can exclude qualified transportation fringe benefits from an employee's wages even if you provide them in place of pay. However, qualified bicycle commuting reimbursements do not qualify for this exclusion."[1]

How to Access Bicycle Benefits at Work 

  • Talk to your employer, along with your fellow bike commuters in your office. Make sure to mention that employers also save money by participating (about 9.5% of their FICA contribution).
  • If your employer already contracts with a Commuter Benefit vendor, request enrollment in the bike benefit program.
  • If the vendor does not offer it, find out when they plan to implement as it is law as of January 1, 2009. If your employer is looking for more information, see our vendor directory.

How to Qualify for Bicycle Benefits

  • Ride your bike for a 'substantial portion' of your commute.
  • Accept only the $20 benefit for biking for transit benefits. The law prohibits commuters from accepting both the transit benefit and biking in the same month.
  • Use the money for a bicycle, bicycle maintenance, repair or storage

Resources 


Contact Information

Commute Smart
Sn Francisco Department of the Environment (SF Environment)
City & County of San Francisco
Phone: (415) 355-3727
Email: CommuteSmart@sfgov.org

Funded By: