Moving Commuter Fringe Benefits Closer to Parity

As you may or may not know, federal law via the IRS Code lets businesses pay for certain commuting expenses on behalf of their employees without that money being counted as income when the employees file their taxes. Meanwhile, the business gets to treat the loot they spent as a tax-deductible business expense. The feds are then short some tax receipts.

You probably won't be surprised to learn that the law gives more tax benefits to people who commute by car than to those who take transit or any human-powered mode. The law provides these monthly maximums [see TITLE 26 > Subtitle A > CHAPTER 1 > Subchapter B > PART III > § 132, (f)(2)] [also available from GPO's FDSYS]:

• Parking: $175
• Transit or commuter van: $100
• Biking: $20

And the biking benefit is hard to claim -- there are limits & rules that place a burden on the cyclist to prove their worthiness. Meanwhile the employer does all the work for the parking benefit.

Apparently some of these amounts have been adjusted by recent legislation that is not yet noted in the Federal Code. Here are the IRS rules for employers in 2011:

• Parking: $230
• Transit or commuter van: $120
• Biking: $20

Whatever the exact benefit maximums are, the League of American Bicyclists has a page with information about them. It offers advice to both employers and employees on how to go about implementing and claiming the benefit. There's also company called Commuter Check that's focused on implementing the benefits.

That's the way things stand now.

Rep. Blumenauer (OR 3 - D) wants to change things. He has repeatedly proposed a bill called the Commuter Relief Act (most recently in May), which would set the amounts at:

• Parking: $200
• Transit or commuter van: $200
• Biking: leaves it at the current rate

His bill doesn't just move toward parity in the amount of the benefit, though. It would also make several changes to actually promote not driving.

• makes it easier to claim the biking benefit
• lets employees combine the bike benefit with the transit benefit, with a total cap of $200
• makes employers offering the parking benefit let employees opt for cash instead
• expands the van pool benefit
• lets self-employed people use the transit benefit

Doesn't that sound nice? Instead of preferentially supporting parking for cars, the law would tip the playing field somewhat in the other direction by allowing people to forgo the parking benefit, giving them the option of applying it to other things.
If you support this idea, tell your Representative to Congress to support H. R. 1825, the Commuter Relief Act.