What is the Bicycle commuting reimbursement exclusion?
The bicycle commuting reimbursement exclusion was a tax-free fringe benefit that allowed employers to reimburse eligible bicycle commuting costs outside employee taxable wages. OBBBA Section 70112 permanently ends the exclusion beginning in 2026, so bicycle reimbursements generally become taxable compensation unless another benefit structure applies. Employers replacing the benefit should compare taxable reimbursements with Health savings account or other fringe benefit options before updating compensation policies.
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