HR Alert

Massachusetts Exclusion Amounts for Employer-Provided Parking, Transit Pass, and Commuter Highway Vehicle Benefits

Amounts Apply for Taxable Years Beginning in 2017

Massachusetts has issued a Technical Information Release that explains the 2017 Massachusetts personal income tax exclusion amounts for employer-provided parking, transit pass, and commuter highway vehicle benefits allowed to employees.

Background
In general, for purposes of determining Massachusetts gross income, the Massachusetts personal income tax laws follow the provisions of the federal Internal Revenue Code ("IRC") as amended and in effect on January 1, 2005. Accordingly, Massachusetts follows IRC section: 132(f), as amended and in effect on January 1, 2005, which excludes from an employee's gross income--subject to a monthly maximum--employer-provided parking, transit pass, and commuter highway vehicle transportation benefits. (Note that Massachusetts does not adopt the federal qualified bicycle commuting reimbursement.) IRC section: 132(f)(6) provides for an inflation adjustment to those monthly maximums in the case of any taxable year beginning in a calendar year after 1999.

Exclusion Amounts
Taking into account inflation adjustments, the Massachusetts monthly exclusion amounts for taxable years beginning in 2017 are $255 for employer-provided parking and $135 for combined transit pass and commuter highway vehicle transportation benefits. (For taxable years beginning in 2017, the federal monthly exclusion amounts are $255 for employer-provided parking and $255 for transit pass and commuter highway vehicle benefits combined.)

Note: The Massachusetts exclusion amount for combined transit pass and commuter highway vehicle transportation benefits does not include the increase in the federal exclusion amount for such benefits that was signed into law (Division Q, section: 105) on December 18, 2015. Massachusetts does not follow this amendment, and is not expected to follow any future amendments to IRC section: 132(f), unless the Massachusetts Legislature acts to adopt such changes.

Click here to read the Technical Information Release.


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