Bicycle commuters get a tax-free benefit in 2009. This year, employers are allowed to reimburse employees up to $20 per month for the costs of commuting to work via bicycle. Reimbursable costs include the cost of the bike, repairs and storage costs.  The benefit is allowed only in months when the bicycle is used for a substantial portion of the commute.

But, employees receiving this benefit cannot receive any other tax-free commuting perk such as parking, transit passes or van pools. If they do, the bicycle commuting exclusion is lost for the month.  So, employees who get tax-free mass transit subsidies from employers are not eligible for the bicycle benefit if they bike to the train station from their homes and then use the transit subsidy to ride the train.

As for employers, the bicycle benefit cannot be funded through a salary reduction, as is allowed for parking and mass transit subsidies.  Consequently, companies offering the bicycle benefit will not save on employment taxes.