What is e-bike tax credit and how to use it?

What is e-bike tax credit and how does it work?

E-bike popularity is growing, especially among delivery riders who use it as one of the primary work transportation.

There are many benefits to using electric bikes. They are eco-friendly, fast, and reliable, and they help delivery riders get some exercise while at work.

In 2021, two congressmen started a campaign to provide certain incentives, such as e-bike tax credits, to e-bike riders.

The bill was named the E-BIKE Act to incentivize electric bikes, and it was designed to resemble the existing act for electric cars.

This bill aims to make more people, including delivery riders, switch to e-bikes as an environmentally friendly option.

Here is what you need to know if you’re wondering is there a tax credit for electric bikes and do e-bikes qualify for tax credit of any sort.

Are e-bikes tax deductible for delivery drivers

Yes, e-bikes can be tax-deductible for delivery drivers in NYC, considering they are used for business purposes.

However, you must fulfill certain conditions to claim your e-bike tax credit and receive certain incentives.

If delivery riders are classified as independent contractors, which is typical for those working with platforms such as Uber Eats, DoorDash, or Grubhub, they can deduct business expenses related to their work.

This includes the cost of the e-bike, maintenance, battery replacements, accessories, and other related expenses.[1]

In NYC and New Jersey, the Department of Consumer and Worker Protection (DCWP) provides tax deduction guidance for self-employed delivery riders.

One of the most important things is that the riders need to keep detailed records of their business expenses, such as bike maintenance or rent.

Otherwise, they might not be able to claim these deductions accurately.

How to make tax deductions with Whizz

There are a few ways you can use your Whizz e-bike to make tax deductions as a delivery rider.

Some of the things you can deduct include:

Vehicle expenses, such as costs of buying and maintaining your e-bike.
Additional delivery equipment, including backpacks and delivery bags.
Uniforms and work clothing.
Insurance.
Subscriptions and memberships.
Occasional parking and toll fees.
Health insurance premiums.
Accountant or tax professional fees.

To file your tax deductions, you should use IRS Form 1040 Schedule C. You can download the form directly from the IRS website.

This can help you reduce your tax expenses working as a delivery rider.

What is the EBike Act

The EBike Act was proposed on February 11th, 2021, by Congressman Earl Blumenauer (D-Ore) and Jimmy Panetta (D-Calif).

Its purpose is to encourage people and delivery riders to use electric bicycles. They’d do this by offering an e-bike tax credit.

This act would affect anyone owning an e-bike, and not just delivery riders who already have a way to deduct their e-bike expenses.

The EBike Act details a proposed tax incentive that would give taxpayers a 30% back of the retail price on their e-bike in the form of a tax credit. This credit couldn’t be more than $1,500. [2]

What e-bikes would qualify

Not all bikes would be eligible for the e-bike tax credit given by the EBike Act.

According to the Bill, a qualified e-bike is a “two-wheeled vehicle that is, among other things, equipped with an electric motor of less than 750 watts that is capable of propelling such vehicle.” [3]

An e-bike should also have fully operable pedals and a saddle or a seat for the riders.[2]

Finally, the e-bikes should be purchased in the United States, and the purchase should be made by the taxpayer in question. Also, the bike has to be a new one and not used.

This would include most popular e-bike models for delivery riders, including the Storm-2.

How Much E-Bike Tax Credit Would A Rider Get?

There are two limitations to how much money a delivery rider would get by using an e-bike.

Generally, you’d get 30% of the total cost of your e-bike (both the initial purchase and maintenance). However, the final number you can reach is $1,500.

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You cannot choose between the two. Instead, the lower option would be the one that’d apply.

If there is a joint tax return where two family members purchased e-bikes, the credit amount would double. [2]

Did the e-bike tax credit pass in NYC and New Jersey?

If you’ve researched how to claim the e-bike tax credit, you might be surprised to find some opposing information.

This is because the EBike Act is, unfortunately, just a bill, at least as of July 2024. While it has 20 sponsors, it has not yet passed. This means that while you can get tax deductions from using an e-bike as a delivery rider, you cannot get any tax credit.

However, New York has proposed an e-bike rebate program, but it is not yet active. The proposed program aims to offer a rebate up to $1,100 for e-bike purchases.[4]

Similarly, there is a proposed bill in New Jersey to create an e-bike rebate program that would provide up to $2,000 in rebates, split into two $1,000 payments. [5]

Future of the E-bike Tax Credit

It is a good thing that delivery riders can already get tax deductions from riding e-bikes during their work shift. However, by offering e-bike tax credits, the government could make this eco-friendly vehicle even more affordable and attractive for most riders.

Also, if passed, the Act would benefit not only delivery riders, but everyday commuters, as well.

This would help lower carbon emissions while keeping delivery riders healthy and fit.

Of course, it is impossible to say with certainty what will happen with the e-bike tax credit. There is still a long way to go. The Bill needs to pass in the House, in the Senate, and finally to get approved by the President.

However, considering how successful the tax credit for electric cars was, we can remain enthusiastic and hope that the EBike Act will have the same future.

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