IRS Revenue Procedure 2003-85 provides the 2004 cost-of-living inflation adjustment for the qualified transportation fringe benefit monthly exclusion amounts allowed under IRC § 132(f)(2). The federal exclusion amounts for tax year 2004 are $195 per month for employer-provided parking and $100 per month for employer-provided vanpool and transit pass benefits combined. Revenue Procedure 2003-85, § 3.12. In contrast, Massachusetts follows the inflation adjustment formula allowed under the January 1, 1998 Code. As a result, the Massachusetts exclusion amounts for tax year 2004 are $200 per month for employer-provided parking and $75 per month for employer-provided vanpool and transit pass benefits combined.
Massachusetts does not adopt the federal gross income exclusion for transit pass and employer-provided vanpool benefits if the employer offers the benefit as a reduction in salary and the employee chooses the benefit in lieu of salary. The federal provision allowing the choice of salary or transit pass and employer-provided vanpool benefits was enacted on June 6, 1998, and therefore, is not incorporated into the Code as amended and in effect on January 1, 1998.
As a result, if an employee's salary and federal gross income have been reduced by the value of a transit pass or employer-provided vanpool benefit, the employer must add back the exclusion amount (in the employee's W-2) for Massachusetts tax purposes. TIR 99-23.
Commissioner of Revenue
April 8, 2004
People also viewed...
You recently viewed...
Personalization is OFF. Your personal browsing history at Mass.gov is not visible because your personalization is turned off. To view your history, turn your personalization on.
Learn more on our .
*Recommendations are based on site visitor traffic patterns and are not endorsements of that content.