Because I lead a life of excitement and intrigue, I was reading through the IRS publication that outlines the transportation related fringe benefits allowed under current tax law. These are benefits that employees can claim with pre-tax income, thus reduces their and their employers overall tax burden.
The big news last year was that employees can now claim $20 per month in bicycle commuting expenses. This was hailed as a step towards equalizing how bicycles are treated in the confusing world of subsidies, cross-subsidies and transportation finance. As a symbolic measure, this is a good step. As a practical measure, not so much. For instance, each and every employee in the US can receive up to $120 per month in pre-tax transit benefits AND $230 per month in pre-tax parking benefits. So if you pay for parking at a park and ride lot, you can get money for parking and transit, for instance. But with bikes, once you claim your $20 per month you become ineligible for transit or parking benefits. This reduces the incentive to bike and use transit for a commute trip, or park and bike, or other multi-modal bike combinations.
If you calculate the tax savings by taking a transit or parking pass, they far exceed the total amount--not just the tax savings--available through the bike expenses. There is still a tax incentive to use modes other than bikes.
No comments:
Post a Comment