From: The LIBRARY of CONGRESS
H.R.1424
Title: A bill to provide authority for the Federal Government to purchase and insure certain types of troubled assets for the purposes of providing stability to and preventing disruption in the economy and financial system and protecting taxpayers, to amend the Internal Revenue Code of 1986 to provide incentives for energy production and conservation, to extend certain expiring provisions, to provide individual income tax relief, and for other purposes
From the 6th version of H.R.1424:
SEC. 211. TRANSPORTATION FRINGE BENEFIT TO BICYCLE COMMUTERS. (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.
ADDED: 10/06/2008
There is a bit of discussion in the cycling circles as to what this all means. I will continue to update this entry and probably add additional information as I find or hear it. See this IRS link for additional explanation: Transportation (Commuting) Benefits from which appears to be Publication 15-B
This section discusses exclusion rules that apply to benefits you provide to your employees for their personal transportation, such as commuting to and from work. These rules apply to the following transportation benefits.
De minimis transportation benefits.
Qualified transportation benefits.
Special rules that apply to demonstrator cars and qualified nonpersonal-use vehicles are discussed under Working Condition Benefits, later.
You can exclude the value of any de minimis transportation benefit you provide to an employee from the employee's wages. A de minimis transportation benefit is any transportation benefit you provide to an employee if it has so little value (taking into account how frequently you provide transportation to your employees) that accounting for it would be unreasonable or administratively impracticable. For example, it applies to occasional transportation fare you give an employee because the employee is working overtime if the benefit is reasonable and is not based on hours worked.
This exclusion applies to the following benefits.
A ride in a commuter highway vehicle between the employee's home and work place.
A transit pass.
Qualified parking.
The exclusion applies whether you provide only one or a combination of these benefits to your employees.
Qualified transportation benefits can be provided directly by you or through a bona fide reimbursement arrangement. However, cash reimbursements for transit passes qualify only if a voucher or a similar item that the employee can exchange only for a transit pass is not readily available for direct distribution by you to your employee. A voucher is readily available for direct distribution only if an employee can obtain it from a voucher provider that does not impose fare media charges or other restrictions that effectively prevent the employer from obtaining vouchers. See Regulations section 1.132-9 for more information.
You can exclude qualified transportation fringe benefits from an employee's wages even if you provide them in place of pay. For information about providing qualified transportation fringe benefits under a compensation reduction agreement, see Regulations section 1.132-9(b)(Q-11).
Commuter highway vehicle. A commuter highway vehicle is any highway vehicle that seats at least 6 adults (not including the driver). In addition, you must reasonably expect that at least 80% of the vehicle mileage will be for transporting employees between their homes and work place with employees occupying at least one-half the vehicle's seats (not including the driver's).Transit pass. A transit pass is any pass, token, farecard, voucher, or similar item entitling a person to ride, free of charge or at a reduced rate, one of the following.Mass transit may be publicly or privately operated and includes bus, rail, or ferry. For guidance on the use of smart cards and debit cards to provide qualified transportation fringes, see Rev. Rul. 2006-57, which is on page 911 of Internal Revenue Bulletin 2006-47 at www.irs.gov/pub/irs-irbs/irb06-47.pdf, and
On mass transit.
In a vehicle that seats at least 6 adults (not including the driver) if a person in the business of transporting persons for pay or hire operates it.
Notice 2007-76, which is on page 735 of Internal Revenue Bulletin 2007-40 at
www.irs.gov/pub/irs-irbs/irb07-40.pdf.Qualified parking. Qualified parking is parking you provide to your employees on or near your business premises. It includes parking on or near the location from which your employees commute to work using mass transit, commuter highway vehicles, or carpools. It does not include parking at or near your employee's home.Employee. For this exclusion, treat the following individuals as employees.
A current employee.
A leased employee who has provided services to you on a substantially full-time basis for at least a year if the services are performed under your primary direction or control.
A self-employed individual is not an employee for qualified transportation benefits.
Exception for S corporation shareholders. Do not treat a 2% shareholder of an S corporation as an employee of the corporation for this purpose. A 2% shareholder is someone who directly or indirectly owns (at any time during the year) more than 2% of the corporation's stock or stock with more than 2% of the voting power. Treat a 2% shareholder as you would a partner in a partnership for fringe benefit purposes, but do not treat the benefit as a reduction in distributions to the 2% shareholder.Relation to other fringe benefits. You cannot exclude a qualified transportation benefit you provide to an employee under the de minimis or working condition benefit rules. However, if you provide a local transportation benefit other than by transit pass or commuter highway vehicle, or to a person other than an employee, you may be able to exclude all or part of the benefit under other fringe benefit rules (de minimis, working condition, etc.).Exclusion from wages. You can generally exclude the value of transportation benefits that you provide to an employee during 2008 from the employee's wages up to the following limits.
$115 per month for combined commuter highway vehicle transportation and transit passes.
$220 per month for qualified parking.
