I'm not an accountant, but I work in the payroll industry with accountants, and I am familiar with the bike tax credit.
Here's what I know, in a nutshell:
The Qualified bicycling commuting reimbursement (aka bike commuting credit) is essentially a qualified transportation fringe benefit available to employers, much like paying for parking, transit passes, or vanpool.
It is not a credit an individual can take on a tax return.
It is $20 per month-- per IRS publication 15B for 2010: "For any calendar year, the exclusion for qualified bicycle commuting reimbursement includes any employer reimbursement during the 15-month period beginning with the first day of the calendar year for reasonable expenses incurred by the employee during the calendar year.
"Reasonable expenses include:
-- The purchase of a bicycle and
-- Bicycle improvements, repair, and storage.
"These are considered reasonable expenses as long as the bicycle is regularly used for travel between the employee's residence and place of employment."
The $20 per qualified bicycle commuting month is excluded from wages (it is given to employee outside of payroll).
S-corporation owners cannot take advantage of the qualified transportation benefits. Employers may not combine the bicycle commuting reimbursement with any other qualified transportation fringe benefit.
Hope this helps; for more info, read through pages 19 and 20 of IRS publication 15B, available free on the IRS website at www.irs.gov