I f you’re tired of being stuck in traffic commuting to work, you may consider an e-bike as an energy-efficient alternative.

Alert: Currently, there are no federal income tax breaks for buying electric bicycles. But proposed legislation would create a credit for new e-bike purchases. What’s more, you may already be entitled to tax benefits for e-bikes on the state tax level.

Here’s the whole story: Several variations of e-bike legislation have been bandied about in Congress. Notably, the E-Bike Act, first introduced in 2021, provides individuals with a refundable 30% tax credit for purchasing a new e-bike for less than $8,000. The credit would be available once every three years (twice for joint filers buying two electric bicycles). But in the latest iteration of the proposed law, the credit would be limited to certain taxpayers, comparable to the rules for electric vehicles (EVs). It could only be claimed by single filers with earnings of up to $150,000, or $300,000 for joint filers. Some consolation: You still may be entitled to income tax breaks and/or other incentives, such as rebates, from your home state. The amount of rebate or tax benefit varies from state to state. For example, Florida residents may be eligible for a 30% credit of up to $1,500 for purchasing an e-bike costing less than $8,000. Massachusetts also currently offers rebates for low income groups and a 30% credit for all residents. In addition, the situation is in flux as more states weigh e-bike legislation.

Practical advice: Check on the potential benefits in the state where you reside.

Tip: We will keep you posted on any significant developments at the federal level.