Bicycle Commuter Benefit intro box
Commuter benefits provide ways for employers and employees to lessen the financial burden of getting to and from work. Since the creation of commuter tax benefits in 1984, these tax benefits have primarily benefitted people who drive to work, make higher than average incomes, and work for large organizations. According to TransitCenter, a non-profit transit advocacy organization, only 7% of the American workforce has access to subsidized commuter benefits and only 2% of the workforce uses them.
When commuter benefits for transit and bicycling are offered, employers can see significant savings and benefits from people utilizing more active modes of transportation. Biking to work is a great way for employees to meet the CDC’s physical activity guidelines of at least 150 minutes of moderate cardiovascular activity per week, and studies support biking to work improving employee retention and productivity. Due to the benefits associated with biking to work, many employers offer incentives to bike to work even if they do not offer the Bicycle Commuter Tax Benefit.
The Bicycle Commuter Tax Benefit is a benefit that can only be offered by employers. As of 2018, the only possible tax benefit of the Bicycle Commuter Tax Benefit is the deduction for costs associated with the benefit, which can be claimed by an employer (under Sec. 13304(c)(2) of the Tax Cuts and Jobs Act). Any reimbursement given to employees under a Bicycle Commuter Tax Benefit program is taxable as income to the employee. The provisions of the Tax Cut and Jobs Act related to the Bicycle Commuter Tax Benefit expire in 2026.
The League of American Bicyclists would prefer a commuter benefit system that prioritizes the needs of lower-income workers and provides parity or incentives for active transportation, such as bicycling and walking. Our current commuter benefit system primarily serves higher-income workers and primarily provides incentives to drive to work. You can find a discussion of commuter benefits prepared by the League here:
The resources below are meant to help employers interested in utilizing the Bicycle Commuter Tax Benefit as it exists under federal law. Given the limited tax benefit under current law, employers who are interested in promoting biking to work may want to participate in our Bicycle Friendly Business program, which provides a more holistic approach to making it easier for employees to bike to work – including other incentive programs.