New fringe benefit for bicycle commuting

Terry Connor passes along this item from the BNA Daily Labor Report about the bicycle commuter tax break that took effect Jan. 1: Effective Jan. 1, employees who commute to work by bicycle can be reimbursed for some of their expenses as part of the $700 billion financial sector bailout package (H.R. 1424) signed by President Bush in October. The reimbursement of up to $20 per month is considered a qualified transportation fringe benefit. According to IRS Publication 15-B, Employer's Tax Guide to Fringe Benefits, commuters who travel to and from work by bicycle in a qualified month can be reimbursed by employers up to $240 per year for maintaining, repairing, storing, and buying bicycles. A qualified month is any month an employee “regularly uses the bicycle for a substantial portion of the travel between the employee's residence and place of employment.” An employee who receives the biking reimbursement cannot receive other commuting benefits, including parking or transit benefits, in the same month. IRS instructions, pretty much from the employer's point of view, may be found at the League of American Bicyclists' site: http://www.bikeleague.org/news/100708faq.php