Details of Public Law 119-21, section 70112 , One Big Beautiful Bill Act

This provision permanently removes the exclusion from gross income and the exception that prohibits the deduction for reimbursements of qualified bicycle commuting expenses as previously suspended by the Tax Cuts and Jobs Act (PL 115-97, section 11047).

Under the PITL, California conforms to the federal rules that allowed a gross income exclusion for qualified bicycle commuting expenses as of the specified date of January 1, 2025. California did not conform to the temporary federal suspension of the exclusion for taxable years beginning after December 31, 2017, and before January 1, 2026, and does not conform to the permanent federal suspension of this exclusion.

However, current California law provides an exclusion from gross income for any compensation or the fair market value of any other benefit, except salary or wages, received by an employee from an employer for participation in any ridesharing arrangement in California, including an employee bicycling to or from his or her place of work. This enhanced exclusion is not subject to any limitation.

As a result, California does not conform to the changes made by this provision.

The estimated revenue impact to conform to the above provisions would result in the following loss:

26/27 27/28 28/29 29/30 $(12,000,000) $(9,600,000) $(9,900,000) $(10,000,000)