With gas prices going up and environmental concern on our minds, a lot more of us are being encouraged by our employers to find alternative ways to get to work. One of the ways people are enjoying their commute to work now is with a bicycle.
Starting in tax years 2009 and going forward, employers can offer employees a tax-free fringe benefit of up to $20 a month for each month of qualified bicycle commuting during the tax year. What is a month of qualified bicycle commuting you ask? A “qualified bicycle commuting month” is any month in which an employee regularly uses a bicycle for a substantial portion of the travel between his residence and his place of employment, and does not receive any other qualified transportation fringe benefits such as commuter highway vehicle transportation, transit passes, or parking benefits.
This fringe benefit for bicycle commuting should be used toward reasonable expenses incurred by the employee during the calendar year for the purchase of a bicycle and bicycle improvements, repair, and storage.
Its long been thought that the greatest benefit to riding your bike to work is that of getting some much needed exercise, but now we can add one more item to that list.
Kathryn Wright, CPA
