The White House's latest budget deal has some good news: the federal tax credit that was proposed for electric bike purchases has survived the current round of Congressional bloodletting. It has been restored to 30 percent after being cut by the House of Representatives to 15 percent.
It is a great proposal, even though it is not widely adopted. E-bikes will become much more affordable for Americans if the deal is approved in its current form. This could lead to a major change in transportation options for millions across the country.
This legislation would provide Americans with a tax credit that is refundable and worth 30% of the purchase price for e-bikes, subject to a cap of $1,500. The tax credit would be available to all three classes of e-bikes, except for bikes with motors greater than 750W. This credit would be completely refundable which would make it possible for lower-income people to claim it.
Some caveats
The program will not accept bikes that are more than $5,000 in price. The credit is also subject to means testing, which means that $200 would be withdrawn for every $1,000 spent on the purchase of a bike by individuals earning $75,000, heads earning $112,500 and married couples earning $150,000.
E-bikes can be significantly more expensive than regular bikes. They typically cost anywhere from $1,000 to $8,000. E-bikes are more expensive than regular bikes, and can be used to replace many people's car trips. This could make a real difference in fighting climate change. Recent research has shown that carbon emissions could drop by 12 per cent if e-bikes were used for 15 percent of car trips.
Other benefits are available for cyclists, as well as other provisions in the 1,600-page bill. Pre-tax commuter benefits would be available to people who use bikes to commute to work and those who bike-share. The proposal would allow employees to be eligible for a bicycle benefit up to 30% of the parking benefit, which is currently equal to $81 per month and less than $1,000 annually, to help them bike.
