Breaking Down the Federal Bike Commuter Benefit

Eric Sakalowski assesses the federal bike commuter credit proposed as part of the bicycle benefits in the Build Back Better Act, which is intended "to cover a broad range of expenses that a person might incur as they commute to work by bike." The program doesn't require a new bike purchase and covers things like bike share memberships. "[E]mployers can offer employees up to $81 a month in benefits that are not subject to income tax," a much higher benefit than the $20 provided in an earlier version of the credit.

"Even more importantly, a coordination provision allows the same person to claim the bike commuter benefit and the transit and parking benefits under existing law," which allows "more occasional bike commuters to claim the benefit thereby fostering more commutes by bike for those who do more mixed forms of transportation." Unfortunately, the credit does not apply to independent contractors or people not in the labor force, "and these groups tend to be disproportionately disadvantaged." Meanwhile, the seemingly generous $81 monthly benefit is substantially less than the $270 offered by the transit and parking benefits. 

Along with the e-bike credit, says Sakalowsky, the bike commuter credit "will not change the situation overnight, especially as we continue to lavish far richer tax credits on cars. But, they offer a foundation at the federal level on which we can continue to build."