Changes to Employee Commuting Benefits Under the TCJA
Prior to the passage of the Tax Cuts and Jobs Act (TCJA), employers could deduct transportation fringe benefits such as transit passes, parking passes, and bicycle commuting reimbursements provided to their employees. These benefits could be provided by an employer to an employee on a tax-free basis for commuting between an employee’s home and the workplace. Now, employers are not able to deduct these commuting benefits provided to their employees. Employees will still be able to exclude the benefits from their income that they received from their employers. However, the bicycle commuting reimbursement, which allowed employees to exclude from their income bicycle commuting reimbursements of up to $20 each month, was completely repealed by the TCJA.
In Oregon, bicycle commuting employees will not only lose their bicycle reimbursement benefits, they will also have to pay more for their new bicycles. Since January 1, 2018, sales of new bicycles over $200 are subject to a $15 excise tax. Only qualified bicycles with wheels over 26 inches will be subject to the tax.
Employers may still provide bicycle commuting incentives to their employees; however, they will not receive the tax benefits
that they once enjoyed.