Section 211 of the Bail Out Bill as it relates to Internal Revenue Code Section 132(f) - Qualified Transportation Fringe.

Cycle Snack: Transportation fringe benefit to bicycle commuters?

Since the original posting on this topic (Saturday) the Snack has been getting quite a few visits from what appears to be cyclists trying make to sense of this amendment. I thought as a service to everyone coming here I would take a shot at trying to update the existing law with the amendment. Hopefully, it will make sense.

Section 211 of the Senate Bailout bill states:

“(a) In General- Paragraph (1) of section 132(f) is amended by adding at the end the following:

`(D) Any qualified bicycle commuting reimbursement.’.

(b) Limitation on Exclusion- Paragraph (2) of section 132(f) is amended by striking `and’ at the end of subparagraph (A), by striking the period at the end of subparagraph (B) and inserting `, and’, and by adding at the end the following new subparagraph:

`(C) the applicable annual limitation in the case of any qualified bicycle commuting reimbursement.’.

(c) Definitions- Paragraph (5) of section 132(f) is amended by adding at the end the following:

`(F) DEFINITIONS RELATED TO BICYCLE COMMUTING REIMBURSEMENT-

`(i) QUALIFIED BICYCLE COMMUTING REIMBURSEMENT- The term `qualified bicycle commuting reimbursement’ means, with respect to any calendar year, any employer reimbursement during the 15-month period beginning with the first day of such calendar year for reasonable expenses incurred by the employee during such calendar year for the purchase of a bicycle and bicycle improvements, repair, and storage, if such bicycle is regularly used for travel between the employee’s residence and place of employment.

`(ii) APPLICABLE ANNUAL LIMITATION- The term `applicable annual limitation’ means, with respect to any employee for any calendar year, the product of $20 multiplied by the number of qualified bicycle commuting months during such year.

`(iii) QUALIFIED BICYCLE COMMUTING MONTH- The term `qualified bicycle commuting month’ means, with respect to any employee, any month during which such employee–

`(I) regularly uses the bicycle for a substantial portion of the travel between the employee’s residence and place of employment, and

`(II) does not receive any benefit described in subparagraph (A), (B), or (C) of paragraph (1).’.

(d) Constructive Receipt of Benefit- Paragraph (4) of section 132(f) is amended by inserting `(other than a qualified bicycle commuting reimbursement)’ after `qualified transportation fringe’.

(e) Effective Date- The amendments made by this section shall apply to taxable years beginning after December 31, 2008.”

Internal Revenue Code Section 132(f) - Qualified Transportation Fringe.

The following is a version of the amended tax code section. An official version of the tax law may be found at 26 USC Section 132(f).

I have inserted the text from Section 211 in red.

(f) Qualified transportation fringe

(1) In general

For purposes of this section, the term “qualified transportation fringe” means any of the following provided by an employer to an employee:

(A) Transportation in a commuter highway vehicle if such transportation is in connection with travel between the employee’s residence and place of employment.

(B) Any transit pass.

(C) Qualified parking.

(D) Any qualified bicycle commuting reimbursement.

(2) Limitation on exclusion

The amount of the fringe benefits which are provided by an employer to any employee and which may be excluded from gross income under subsection (a)(5) shall not exceed—

(A) $100 per month in the case of the aggregate of the benefits described in subparagraphs (A) and (B) of paragraph (1), and

(B) $175 per month in the case of qualified parking, and

(C) the applicable annual limitation in the case of any qualified bicycle commuting reimbursement.

(3) Cash reimbursements

For purposes of this subsection, the term “qualified transportation fringe” includes a cash reimbursement by an employer to an employee for a benefit described in paragraph (1). The preceding sentence shall apply to a cash reimbursement for any transit pass only if a voucher or similar item which may be exchanged only for a transit pass is not readily available for direct distribution by the employer to the employee.

(4) No constructive receipt

No amount shall be included in the gross income of an employee solely because the employee may choose between any qualified transportation fringe other than a qualified bicycle commuting reimbursement and compensation which would otherwise be includible in gross income of such employee.

(5) Definitions

For purposes of this subsection—

(A) Transit pass

The term “transit pass” means any pass, token, farecard, voucher, or similar item entitling a person to transportation (or transportation at a reduced price) if such transportation is—

(i) on mass transit facilities (whether or not publicly owned), or

(ii) provided by any person in the business of transporting persons for compensation or hire if such transportation is provided in a vehicle meeting the requirements of subparagraph (B)(i).

(B) Commuter highway vehicle

The term “commuter highway vehicle” means any highway vehicle—

(i) the seating capacity of which is at least 6 adults (not including the driver), and

(ii) at least 80 percent of the mileage use of which can reasonably be expected to be—

(I) for purposes of transporting employees in connection with travel between their residences and their place of employment, and

(II) on trips during which the number of employees transported for such purposes is at least 1/2 of the adult seating capacity of such vehicle (not including the driver).

(C) Qualified parking

The term “qualified parking” means parking provided to an employee on or near the business premises of the employer or on or near a location from which the employee commutes to work by transportation described in subparagraph (A), in a commuter highway vehicle, or by carpool. Such term shall not include any parking on or near property used by the employee for residential purposes.

(D) Transportation provided by employer

Transportation referred to in paragraph (1)(A) shall be considered to be provided by an employer if such transportation is furnished in a commuter highway vehicle operated by or for the employer.

(E) Employee

For purposes of this subsection, the term “employee” does not include an individual who is an employee within the meaning of section 401 (c)(1).

(F) DEFINITIONS RELATED TO BICYCLE COMMUTING REIMBURSEMENT-

(i) QUALIFIED BICYCLE COMMUTING REIMBURSEMENT- The term `qualified bicycle commuting reimbursement’ means, with respect to any calendar year, any employer reimbursement during the 15-month period beginning with the first day of such calendar year for reasonable expenses incurred by the employee during such calendar year for the purchase of a bicycle and bicycle improvements, repair, and storage, if such bicycle is regularly used for travel between the employee’s residence and place of employment.

(ii) APPLICABLE ANNUAL LIMITATION- The term `applicable annual limitation’ means, with respect to any employee for any calendar year, the product of $20 multiplied by the number of qualified bicycle commuting months during such year.

(iii) QUALIFIED BICYCLE COMMUTING MONTH- The term `qualified bicycle commuting month’ means, with respect to any employee, any month during which such employee–

(I) regularly uses the bicycle for a substantial portion of the travel between the employee’s residence and place of employment, and

(II) does not receive any benefit described in subparagraph (A), (B), or (C) of paragraph (1).

(6) Inflation adjustment

(A) In general

In the case of any taxable year beginning in a calendar year after 1999, the dollar amounts contained in subparagraphs (A) and (B) of paragraph (2) shall be increased by an amount equal to—

(i) such dollar amount, multiplied by

(ii) the cost-of-living adjustment determined under section 1 (f)(3) for the calendar year in which the taxable year begins, by substituting “calendar year 1998” for “calendar year 1992”.

In the case of any taxable year beginning in a calendar year after 2002, clause (ii) shall be applied by substituting “calendar year 2001” for “calendar year 1998” for purposes of adjusting the dollar amount contained in paragraph (2)(A).

(B) Rounding

If any increase determined under subparagraph (A) is not a multiple of $5, such increase shall be rounded to the next lowest multiple of $5.

(7) Coordination with other provisions

For purposes of this section, the terms “working condition fringe” and “de minimis fringe” shall not include any qualified transportation fringe (determined without regard to paragraph (2)).

So, assuming I did this correctly, it looks like you still have to convince your employer to give you this benefit. Now, it will be interesting to find out what are the minimum requirements by any company to receive this benefit. For example, how many times a week/month do I have to ride to work for this count? It looks like the maximum benefit is $20/month or $240/year. That will certainly get you a low end commuter but it will not cover all the additional gear that you will need.

First thing I do when I get to the office this morning is hitting the Benefits website and see what I can find, otherwise, I am calling HR.

Old Crappy Ten Speeds: Every bike has a story

Old Crappy Ten Speeds seems to be on the forefront of everyone's minds these days. With the rapid rise of gas this summer, looking for ways to save gas seems to be a big theme and one way to save some gas and get a little exercise at the same time is to ride a bike. So the biking craze, if you can call it that, appears to have once again re-emerged and it seems quite a few people are pulling those old bikes out of the basement or garage and trying to sell them on eBay or Craigslist.

What is an old crappy ten speed? I would categorize it as any road bike with shifters on the down tube or on the stem, made out of steel, and sports 27" wheels. I know Cannondale was making aluminum bikes in the 80's because I recently had a Cannondale SR300, which was aluminum and made in 1985. The cut off point for an old crappy ten speed, in my book, is the 1990s when bike manufacturers started selling bikes with either Shimano STI Levers or Campagnolo Ergolevers and completely moved over to aluminum bikes.

I have seen a few OCTS while riding with my kids on the local rail trails. One of the local bike shops that I frequent told me since June they have seen quite a few OCTS come into the shop for servicing and to get them running again. At one point during the summer I had heard that there was even a shortage on 27 inch tires. Besides for recreation, you really don't see these bikes being used for transportation, at least not in Sub-rural-urbia. I am sure in cities like New Haven, Hartford, and Boston, all manner of OCTS would be seen being ridden by smart people who want to save gas, and I am sure you will see many OCTSs that have been updated to the point that the only original parts is probably just the frameset.

Well, I found an OCTS in action. Situated across form Old Heidelberg, a German Restaurant on Rte 6 in Bethel, CT, is a block of what appears to be efficiency apartments. In the back of one of these apartments is a woman's bike, in pretty good shape, and is never locked up. I pass by it every day on my way to work and the other day I took a picture of it in awe that it has lasted so long without getting stolen.

While the street that the apartments back up to is not busy it is within throwing distance of Rte 6 which is quite busy. There is a BMX track not far from here and I always see kids riding their BMX bikes to and from that park right through here. You would think that some kid would grab it but it's there every day. Maybe it's the style and size of the bike that is just not interesting enough for the local kids to waste their time with, or maybe they don't want to be seen on a girl's bike. I am very impressed with the integrity of the kids in this neighborhood, unlike those who stole Carl's Bike, a heart warming post over on the beat bike blog.

I guess I am just paranoid that I would lock it up. I lock my bike to the rack when I leave the car at work, when I see others who do not. I guess my past experiences have made me overly cautious because I have experienced in the past that no matter how crappy the bike is, someone will find it useful and if it's not secured/locked up it will most likely disappear. Many years ago, I was an exchange student in Germany and borrowed a really cool bike from a friend of my host family.

It was a rusted out jobbie with balloon tires, upright bars, and a three speed. I rode this bike everywhere that I couldn't get to by train. I rode it every day to school and back, to volleyball practice, and to the bar. I never locked it up because it looked like a POS and wouldn't you know it - one night after volleyball practice our regular watering hole is closed so we end up going to a more seedy part of town and when I came out, it was gone!

Last weekend I was at the Bicycle Goodie Shop, which is just up the road from here and as I was coming out I saw someone riding this bike over to the nearby deli! That was the owner of bike! The man looked to be of some direct Asian background and was riding with flip flops, shorts and a tank top. Clearly, this bike is his grocery getter! I don't know if it's the owner's primary source of transportation because it's seems to always be there during work hours. Never-the-less, here is a fine example of a working OCTS!

Transportation fringe benefit to bicycle commuters?

Not trying be political but as some of you know we here in the US are undergoing a economic crunch and our government has decided to bailout those institutions that got us here, that is if any of them are still around by the time the money starts flowing. The big bailout bill, in order to get it to pass, as I have been reading, contains quite a bit of Pork-Barrel spending, or more commonly known as Pork.

I think I had read on BikesnobNYC a comment about part of the bail out package included a benefit to bicycle commuters so I decided to look it up. I found this website run by the Taxpayers for Common Sense that lists the Top 10 Tax Sweeteners in the Bailout Bill. One of these sweeteners that is of interest to the Snack is this one in Section 211:

Sec. 211. Transportation fringe benefit to bicycle commuters

Allows employers to provide a benefit to employees for costs associated with bicycle commuting, including purchase and repair of a bicycle, bicycle improvements, and bicycle storage. This provision was proposed in 2007 in the Senate by Sen. Ron Wyden (D-OR) and in the House by Rep. Earl Blumenauer (D-OR). This provision is estimated to cost $10 million.

Clearly aimed at the State of Oregon, which is probably the bicycle commuting capital of the US. However, this part-time bicycle commuter wants to know is can he benefit from this because it's now a law? It sounds like the answer is no, as a direct benefit, because further research has revealed the way it works is that your company has to provide you, the bicycle commuter, with a benefit for riding to work. Then the company can get a tax benefit for doing so.

For smaller companies, this might be easy to do, but if you work for a large conglomerate then it could be much harder. Since the next big thing in our economy could be Green Economics maybe companies will be more likely to offer this to their employees. I will certainly inquire within my company as to whether they offer something or start offering this now that it's available. I guess if you want to be green you got to do green things.

I wonder which companies already give a benefit to bicycle commuters, especially those that are not in Oregon? I doubt any company offers this in Sub-rural-urbia. If you are reading this, ask your company human resources representative and see what they say. Put it into a suggestion box at work. Can't hurt to try and use the caveat that it will help the company to become more green!

Important Update: Section 211 of the Bail Out Bill as it relates to Internal Revenue Code Section 132(f) - Qualified Transportation Fringe.

The Friday Fix: TomiCog

Received my 16t TomiCog in the mail yesterday but didn't have time to switch it out last night.  Instead, I woke up this morning at 4 AM to do it, however, I cleanded up my work area first.  Organized all my spare parts and tools and then worked on switching out the 20t for the 16t.  What's unique about the TomiCog is that it mounts where you would put your disc brake rotor, thus turning your disc hub into a flip flop hub. 

I wish I had gotten my more offroad fixed gear time but now that I am using the Fixation as a commuter and I want to ride fixed gear, my offroad fixed gear riding will have to wait a while until I build the MonsterXcommuter that I am planning on.  So, out with the old and in with the new.

Below is the 16t ready for mounting.  I torqued the bolts at the recommended settings for disc rotors.

And voila!  Here it is cranking in the drops!  Next week, I start commuting fixed gear again.

Backpack vs Messenger Bag

This post might be better suited for the Bike Commuting blog that I also contribute to but I made my big contribution this week already. Check out my post on the Bicycle to Work blog entitled Where do you park your bike? In that post you will get to see my bike parked in my cubicle with all my biking clothes drying after the ride in. I haven't noticed any odors and so far, and no one has said anything, either.

Earlier this week, without thinking, I brought my laptop home. I completely forgot that the following day I would be commuting by bike to work. Oops! After work, and after my last RAW ride, I spent some time trying to figure out how to bring the laptop back to the office on Tuesday's commute. My options seemed to be drive in and try to shift my ride schedule, switch to more of a messenger type bag - unfortunately the best bag from that is from my old company and I am always wary of bringing too much old company paraphernalia to the new company. Or do I use a backpack?

What is the big deal with messenger bags anyway? Is it just a fad for the hipster set or wanna-be bike messengers? Or do these bags offer something more than what a backpack would offer? I have tried riding with a shoulder slung bag before, it wasn't a Timbuk2, rather a canvas attache. I found riding with it to be somewhat bothersome because it would shift and I would have to keep pulling it back up. The only advantage I could see in this bag is that you might be able to get some different carrying positions that would allow more airflow to your back.

If I remember correctly, the movie Quicksilver stylized bike messengers and depicted how the messenger bag was used so that the messenger could whip the bag to his/her front and deliver the goods without ever having to remove the bag. I saw this often while working downtown in NYC in the mid 1990s, too. But, I am not delivering any messages so it would seem that a messenger bag is not the right gear for a bike commuter unless he or she want's to appear hip. I want functionality, personally.

I ended up choosing the backpack. A 4300 cu ft EMS pack that I have had for 10 years that rarely get's any use. In fact the pack swallowed my laptop briefcase with room to spare. The waist belt and sternum strap made it feel like it was part of my body and it was quite comfortable. The only drawback is it gets rather warm attached to my back the whole time, so there could actually be some advantage to the messenger style bag.

While hitting the various bike commuting blogs I came across an interesting website for commuter bags called Banjo Brothers. They have a waterproof commuting backpack that comes in two sizes.
Click on the image above and it will take you directly to the website for the bag itself. The only thing this is missing is a padded sleeve for a laptop but that would be an easy and low cost addition. Of course another alternative would be to use a pannier.