Chuck Schumer Proposes Making Bike-Share Memberships Tax Deductible

If you drive to work, the IRS allows you to pay for parking with pre-tax money. Same goes if you take the train or the bus (though transit commuters can’t claim as much tax-free earnings as car commuters). People who ride their own bikes are also eligible to deduct some associated costs. But if you get to work using Citi Bike, Divvy, Nice Ride, or any of the other bike-share systems sprouting up in American cities, you get no such assistance from Uncle Sam.

Those to use bike share to commute to work may soon be eligible for the same tax benefits everyone else receives. Photo: Steven Vance
People who ride bike-share to work may soon be eligible for tax benefits like other commuters. Photo: Steven Vance

New York Senator Chuck Schumer wants to change that by treating bike-share memberships like other commuting costs. Schumer plans to add an amendment to a Senate package of tax benefit extensions that would specifically list bike-share memberships as an eligible expense for transportation fringe benefits.

“Bike share programs are an efficient, healthy, and clean form of mass transportation, and they should be treated the same way under the tax code as we treat car and mass transit commuters,” he said in a statement yesterday.

The amendment would allow commuters to deduct up to $20 per month in bike-share expenses from their taxable income, the same as regular bike commuters. That would make the entire cost of an annual bike-share membership tax-deductible. Chicago’s Divvy, for instance, is prices at $75 per year, NYC’s Citi Bike costs $95, and at the very high end of the spectrum, Deco Bike in Miami Beach costs $150. For commuters, a low-cost transportation option could become an even better bargain.

  • Greg Costikyan

    To be clearer, it would -not- allow you to deduct the cost of bike share from your income tax, if you pay for it yourself. Rather, it would allow your employer to pay for your bike share membership as a perk, and account for the cost as cost of doing business, thereby reducing their taxes — just as they can do up to $225/month for parking, or $135/month for transit.

  • Cold Shoaler

    The commuter benefit for riding your own bike is miniscule and dependent on your employer participating. Does anyone even do it? If so, is it worth the paperwork?

  • robug

    Not exactly. This transit benefit allows employees to pay for transit benefits pre-tax, so they do not pay income taxes on that portion of their paycheck. So you are correct that it isn’t a deduction at tax time, but not because it is paid for by the employer, but rather because the employee never paid taxes on the money in the first place. The money is simply excluded from the taxable income reported on the W-2 at the end of the year.

  • Guest

    But you then have to pay taxes on it as a “job perk” so it’s largely meaningless.

  • Alex Nemets

    Dear Senators,
    in
    light of recent proposal to make CitiBike program tax deductible I would
    like to ask you: when will you start working for the people who
    actually elected you to your seats?

    Do you know that simple math of the income breakdown will clearly
    show why more and more working people of New York either leaving New
    York or moving to homeless camps.
    Here it is:
    Tax payments(federal, State, City and other tax deductions such as medicare etc): 35%

    Rent in average 45%, even for some lucky who lives in housings it still 30%.
    How do you expect people to live on what remain from salary – 20% or at best 35%?

    Average
    pre-tax income for family of 3 in NY is $46,000 according to IRS
    stats. Would you survive on $9,200 for all your family needs
    (food,clothing,transportation etc) for a year? This is equivalent of $25
    per day for all 3 or $8.3 per person for a day!
    Instead of meaningless initiatives which only works to put more money
    into citibank coffers why don’t you work on something which would make
    sense and benefits all New Yorkers. For example make rent tax deductible
    or even better – remove personal income tax for families with income
    less that lets say $250,000. More then 80% of the people who voted for
    you are not homeowners – they are renting, and 100% of them have family
    income less then $150,000!

    You spent so much time and efforts to sale anti-tobacco
    legislation and now Marijuana welcome to NY? Instead you should off
    working on reducing level of pollution from the car engines and again
    simple math will show that those efforts would be way more effective:
    would improve our environment and population health situation. If
    researches for anti-tobacco groups was not paid by anti-tobacco lobby
    they would realizes that 90% of their cases belong to the group of
    environmental factors not tobacco related at all.

    Stop wasting time and our money – do something for people who voted for you!

    And
    on the last note, I am closely monitoring your activity and if you
    continue on the current path – come next election I will do all in my
    power to convince my relatives and friends as well as those whom I am
    working with to vote for republicans, betrayal could be less painful if
    done by someone you do not trust anyway.

  • izengabe

    One problem withe the current bike commuter deduction is that it doesnt allow you to deduct for riding your own bike if you also use any other mass transit deduction. So if you take the subways some days and bike on your own bike on other days you cant get a deduction for both. I hope the bike share tax deduction will be allowed to be used in conjunction with other transit program deductions.

  • Steve

    Why do we ever deduct any form of transportation to work? Let’s just end all of these tax deductions.

  • huh?

    No you don’t, it’s not a job perk, it’s a pre-tax transit benefit. read up here: http://en.wikipedia.org/wiki/Employer_transportation_benefits_in_the_United_States

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