You might have read that the bailout of the distressed financial sector was sweetened with a number of additional provisions, including language of Congressman Earl Blumenaeur's bicycle commuter bill.
According to our fellow transportation eggheads at the University of South Florida, the Emegency Economic Stabilization Act of 2008 (H.R. 1424) expands transportation fringe benefits (Section 132(f) that allows up to a $20.00 per month for tax deduction for bicycle commuters.
photo courtesy of Jonathan Maus: www.bikeportland.org
The act allows employers to make tax deductible reimbursements of bicycle commute expenses (it doesn't require anything your employer to do anything). For example, the tax code already allows employers to reimburse employees of parking and public transit fare costs as tax deductible expenses. Now, if you buy a bicycle for commuting (and you actually commute with it), it appears that your employer could choose to reimburse up to $240 a year of those costs: you get the cost of the commuter bike reduced and your employer reduces its tax liability.
The bill's language will still need to be interpreted by the IRS.
You may view HR 1424 here: http://www.thomas.gov/
See IRS' Taxable Fringe Benefits Guide for more information about Qualified Transportation Fringe Benefit Guide: http://www.irs.gov/pub/irs-tege/fringe_benefit_fslg.pdf