A Taxing Bill

Taking away what you probably didn’t already have

Many employers offer a transit subsidy, in which an organization offers a pre-tax benefit to employees in exchange for the employee getting to work a certain way, typically by way of some sort of public transit or shared ride. The benefit gives the employee an incentive for taking the subway, commuter rail, carpool, etc., rather than simply driving. In return, the organization contributes to reduction in pollution and road congestion. Authorized regularly by Congress for monthly amounts between $130 and $260 depending on the economy, transit subsidy is a coveted benefit and in Washington, D.C., thousands of federal employees use it each day to stay off the roads or let someone else do the driving.

There is, or was, this being the point of the post, a bicycle commuter transit benefit as well, a $20 monthly amount to be put toward a bicycle and maintenance, gear and even possibly a gym membership if the employer does not have a shower. Two-forty a year is pretty paltry sum, but it is not nothing and after years of bike commuting, my back-of-the-envelope maths tell me that is pretty close to what I spend on my commuting habit.

The hard thing was getting the bike commuter benefit. Congressional authorization for a pretax benefit is only half the game; the employer has to fund it and administer it. Anecdotal evidence tells me the bike commuter benefit is pretty rare, and from first hand experience, organizations find it easy to ignore, as bike commuters typically make up a very small portion of employees and are either committed through lifestyle (like me, a long-haul, daily, kitted-out rider) or convenience (live a mile or two from work, making riding a bike the easiest way to get there). Thus, the organization knows demand is inelastic and bike commuters gonna bike commute, so no, we don’t offer that. But hey, here’s a bike rack.

Author’s aside: This treatment of bike commuters as incidental to real planning and incentives for commuting is part of the larger mistake organization make when they do not materially encourage bike commuting, it is multibeneficial: Saves money, reduces road congestion and pollution, improves employee health and reduces employee absenteeism, but I digress, this is a topic for a larger series. End aside.

And so whether you had access to this benefit, you no longer do. Among the hack and slash of authorized employer pre-tax credits in the tax bill just enacted into law is an end to the bike commuter benefit, at least through 2025, seven years from now. Add it up with other terminated benefits, like moving and relocation assistance, and employers have fewer tools to attract new talent.

Contact your members of Congress if you want to see the bike commuter benefit reinstated. They could do it with a simple vote at any time.



IRS employer’s guide to fringe benefits for calendar year 2017, featuring the $20 per month bike commuter benefit.

Summary of fringe benefits eliminated in the tax bill.

Full text of HR 1, the tax bill just enacted (search ‘bicycle’ to find references to the termination of the bike commuter benefit).

About Ben Folsom

Ben Folsom is a founding member of the Bike Commuter Cabal, a worldwide group of transport cyclists dedicated to protecting the rights of all road users and to encouraging people everywhere to ride more. Ben and his bikes live with his family in Alexandria, Virginia.