I did our tax return yesterday, via TurboTax online. If you haven’t used TurboTax before, it leads you, step by step, through various types of income, deductions and credits you might be eligible for. One of the items I passed by was tax credits for purchasing electric or alternative-fuel vehicles.
I have an alternative-fuel vehicle. It’s my human-powered bicycle. But it doesn’t count for credits on our tax return. Those tax credits are for people who buy relatively expensive motor vehicles.
The tax credits are supposed to encourage people to buy these vehicles. They are slowly becoming more common. I am still not going to buy one. They are still too expensive for us. We also prefer to have a larger family vehicle, due to the number and type of activities we are involved in (including Girl Scouts), and we do not want to buy a second vehicle just for my commute and the occasional instances when we could use a second car.
There IS a program that benefits bicycle commuters, if your employer chooses to participate. Employers who provide free or discounted transit passes for employees can deduct those expenses on their tax returns (more info here). These employers can also provide a $20 per month cash benefit for bicycle commuters, to defray the costs of bicycle commuting (and the employer then deducts that expense as well). The League of American Bicyclists has details (if you don’t see anything, scroll down).
The other option for employers is to allow employees to purchase transit passes using pre-tax dollars, which then decreases the employee’s taxable income. This option doesn’t have a bicycle component.
My employer does not participate in either option, but hey, it’s a public school district. There’s no tax benefit to them. They already give us good health and retirement benefits. They could participate in the pre-tax transit option (many school districts do, including Portland Public), but honestly, in our area it’s relatively difficult to get to the schools by public transit.
So I’m out of luck for tax credits and commuter benefits. And really, there’s plenty of benefit to my bike commute anyway. I get exercise, and we save money by not owning a second car. But wouldn’t it be nice if there were more ways to encourage people to choose alternatives? The United States famously pays farmers not to grow crops. In light of the most recent climate report, are there more ways we could pay people not to drive?