By Bob Mionske
I noticed that there is a tax break for people who commute and also those who use hybrid vehicles to commute. Someone told me that there may be a deduction available to commuters who ride a bike to work. Is this true?
One Less Car in NY
Dear One Less Car,
You are correct that there is a deduction available for individuals who drive hybrid cars. However, the current deduction of $2000 is set to be reduced by 25 percent per year until it is completely phased out. Even in its current state, the deduction is available only as a one-time deduction and is limited to three approved cars on the market.
As of today, there is no similar tax break available for those who commute to work via bicycle. However, there is pending legislation that intends to create a deduction. The Bike Commuter Act (BCA) would extend the current transportation fringe benefit in the tax code to bicycle commuters. The transportation fringe benefit allows employers to offer employees up to $100 a month for mass transit and up to $185 per month for parking. This tax benefit is voluntary, meaning that if an employer does not want to participate in the program, it does not have to. Further, if the employer does participate it can contribute as little of the maximum as it wishes.
The main argument in support of the BCA is the reduction in congestion, pollution, and wear and tear on the road. Further, the reimbursements for commuting via a bicycle pale in comparison to the benefit of such use. If the bill is enacted, employees would most likely (assuming the transportation fringe benefit is replicated) have the option of receiving cash compensation rather than a deduction. However, the employee would then be subject to employment taxes.
The BCA has not yet made it through the House and it is unclear whether it will in the near future. My advice is to write your local congressman and express your support for the measure and encourage his or her endorsement. Until then, keep in mind that although you are not rewarded monetarily for your ride to work, you are keeping yourself and the environment healthy.
(research and drafting provided by Justin Reiner, law graduate, Willamette University School of Law)
Now read the fine print:
Bob Mionske is a former competitive cyclist who representedthe U.S. at the 1988 Olympic games (where he finished fourth in the roadrace), the 1992 Olympics, as well as winning the 1990 national championshiproad race.After retiring from racing in 1993, he coached theSaturn Professional Cycling team for one year before heading off to lawschool. Mionske’s practice is now split between personal-injury work, representing professional athletes as an agent and other legal issues facing endurance athletes (traffic violations, contract, criminal charges, intellectual property, etc).If you have a cycling-related legal question, please send it to firstname.lastname@example.orgBob will answer as many of these questions privately as he can. He willalso select a few questions each week to answer in this column. Generalbicycle-accident advice can be found at www.bicyclelaw.com.Important notice:
The information provided in the “Legally speaking”column is not legal advice. The information provided on this publicweb site is provided solely for the general interest of the visitors tothis web site. The information contained in the column applies to generalprinciples of American jurisprudence and may not reflect current legaldevelopments or statutory changes in the various jurisdictions and thereforeshould not be relied upon or interpreted as legal advice. Understand thatreading the information contained in this column does not mean youhave established an attorney-client relationship with attorney Bob Mionske.Readers of this column should not act upon any information contained inthe web site without first seeking the advice of legal counsel.