Commuting by bike is increasingly popular in cities around the world, including New York. People choose to commute by bike for a variety of reasons. It’s cheaper and more convenient than just about any form of transportation besides walking, it provides substantial health benefits, it’s better for the environment than other modes of transportation, and it’s just fun. The options for people to commute by bike are also increasing and include owning your own bike, bike share services like Citi Bike, and even electric-assist cargo bikes that can carry multiple children and still have room for groceries.
Under existing federal tax law, employers can deduct up to $265 per month from their employees’ paychecks pre-tax for either public transit or parking. Because the money is deducted before any taxes are levied on it, it is effectively a federal subsidy for both mass transit (which is good because it serves as an incentive for people to take mass transit to work) and parking (which is bad because it serves as an incentive for people to drive to work). Whether or not these benefits are available to employees is typically at the employer’s discretion, except in New York City, where employers of more than 20 people are required to offer this public transit benefit to their employees.
If you’re not bored to death from reading about tax law yet, you might be asking, “Why are cars, trains, buses, and ferries covered by this benefit, but not bikes?” From 2009 until 2017, employers could reimburse employees up to $20 per month pre-tax for commuting by a personally-owned bicycle. Unfortunately, this aspect of the commuter tax credit was “suspended” by the 2017 federal tax reform law until 2026. Needless to say, suspending the bike commute tax credit for almost a decade is functionally the same thing as repealing it entirely. Fortunately, Representative Earl Blumenauer of Oregon has introduced the Bicycle Commuter Act of 2019 (H.R. 1507), which would not just restore the tax credit, but also make it better than it used to be. In addition to allowing the tax credit to be used for a personally-owned bike, the Bicycle Commuter Act would allow the credit to be used for bike share and for e-bikes.
More and more New Yorkers are opting to commute by bike, and we’ll need to do so even more in order to reduce greenhouse gas emissions from transportation and improve our air quality. The Bicycle Commuter Act will help us do that, and provide a tax benefit for commuters who have already made that choice. The Bicycle Commuter Act is a small tax code change that can have a big benefit for New York’s environment. That’s why NYLCV supports this legislation and urges New Yorkers to contact their member of Congress to urge them to co-sponsor H.R. 1507.