Bicyclists benefit from bailout, eligible for stipend

By Rachel Gordon
San Francisco Chronicle
Friday, October 10, 2008

The bailout bill crafted by Congress and the White House to stop the tailspin of the nation's financial sector also includes federal tax benefits for people who commute by bicycle.

Starting in January, workers who use two-wheelers as their primary transportation mode to get to and from work will be eligible for a $20-a-month, tax-free reimbursement from their employers for bicycle-related expenses.

In return, employers will be able to deduct the expense from their federal taxes.

"It significantly legitimizes bicycling and elevates it to a credible commute mode, like riding a bus or train," said Andy Thornley, program director for the San Francisco Bicycle Coalition.

The money could be used to purchase, store, maintain or repair bikes that are used for an employee's commute.

Bike advocates had been trying for seven years to get such a provision passed, but came up short until Congress rushed through the Wall Street bailout package last week and lawmakers squeezed in pet projects. The bicycle benefit was championed by members of the Oregon delegation on Capitol Hill.

Backers estimate that the federal tax rolls may lose out on about $1 million a year because of the new employer write-off, according to the advocacy group League of American Bicyclists.