Massachusetts Commuter Tax Deduction, Income Exclusion, and Pre-tax Savings

This page will tell you what you need to know about Massachusetts commuter tax benefits.

Updated: March 28, 2025

Overview

Massachusetts allows a tax deduction for taxpayers against their personal income for amounts paid for tolls through an E-ZPass account. 

A tax deduction is also allowed (not including amounts that are reimbursed by an employer) for the cost of weekly or monthly transit commuter passes for Massachusetts Bay Transit Authority.

There is also an exclusion from personal income for commuter benefits provided by an employer to an employee, which is governed by Internal Revenue Code § 132.  

Additionally, employers can participate in a commuter cost savings program that allows their employees to set aside pre-tax dollars for eligible commuter expenses through the payroll system.  

This page provides information on these items and other tax savings that may be available to you for commuting costs.

Deduction for Certain Commuting Costs

You can deduct certain commuting costs against your personal income on Form 1 or Form 1-NR/PY for:

• Tolls paid through an E-ZPass MA account
• The cost of weekly or monthly passes for:
  • MBTA transit
  • Bus
  • Commuter rail
  • Commuter boat.
• For taxable years beginning on or after January 1, 2023, the following costs are also eligible for the deduction:
  • All MBTA and Massachusetts regional transit authority fares
  • Bikeshare memberships 
  • Bicycles (including electric bicycles)
  • Bicycle improvements, repairs, and storage
  • All fares for commuter boats.

For single, married filing separate, or head of household filers, the deduction applies only to the portion of costs that exceeds $150.

For married couples filing jointly, the deduction applies only to the portion of costs that exceeds $150, per person. You can't transfer your excess deduction to your spouse.

You can't deduct more than $750 per person.

Learn more with the Massachusetts Commuter Deduction tutorial and TIR 24-4.

Employee Payment by Payroll Reduction

When you pay for an MBTA pass or qualified parking through an account funded through your payroll reductions, the total cost of the pass is eligible for the Massachusetts deduction, assuming all other requirements are met.

Limitations on the Deduction

The deduction for commuter expenses must be reduced by any amount reimbursed by the employer.  Additionally, where commuter expenses are deductible both under Massachusetts General Laws Chapter 62, Section 3(B)(a)(15) and any other provision of law, the same expenses cannot be deducted twice.

To calculate the deduction if you are also benefiting from an exclusion from income:

• Deduct the Massachusetts monthly exclusion amount from the cost of the pass
• The remainder is the amount qualifying for the deduction
• The amount of the deduction is the portion of the qualifying expenses that exceed $150

The total amount deducted cannot exceed $750.

How to Calculate Your Commuter Deduction

Qualification for the deduction is determined by completing the following worksheets:

• For residents:
  • Schedule Y Worksheet - Commuter Deduction
• For part-year residents: 
  • Schedule Y Worksheet - Commuter Deduction
  • To determine the amount allowable, multiply the amount of this deduction by the ratio in Massachusetts Form 1-NR/PY, Line 3, Total Days as Massachusetts resident
  • This deduction must be prorated based on the number of days you are a Massachusetts resident
• For nonresidents:
  • The Schedule Y Worksheet - Commuter Deduction
  • To determine the amount allowable, multiply the amount of this deduction by Massachusetts Form 1-NR/PY, Line 14g, Nonresident Deduction and Exemption Ratio
  • This deduction must be prorated based on the amount of your Massachusetts source income to your total income

Commuter Deduction for Dependents Claimed on Your Income Tax Return

You are allowed a deduction for your dependent’s commuting costs if:

• You purchase a pass or pay eligible fares for a dependent who is claimed on your tax return, and
• The dependent doesn't also claim the deduction

If you and your spouse are filing a joint return, the total amount deducted can't exceed $750 per person, making the maximum deduction for a joint return $1,500.

Example: Husband and wife filing jointly, and husband has a dependent - husband pays for both his and his dependent's MBTA passes, totaling $1,200; wife pays for her passes totaling $550.  Total amount of the deduction allowed would be $1,150 ($750 for husband and $400 for wife).

Husband for Himself and Dependent	Wife for Herself
Amount Paid: $1,200	Amount Paid: $550
Less: ($150)	Less: ($150)
Deduction Amount Before Limitation: $1,050	Deduction Amount Before Limitation: $400
Deduction Amount With Limitation: $750.00	Deduction Amount With Limitation: $400.00

Keeping Record of Commuter Costs

To substantiate allowable commuting costs, please keep records of:

• Monthly passes 
• E-ZPass statements
• Credit card statements
• Bank statements 
• Pay stubs.

Income Tax Exclusion for Employer-Provided Benefits

In addition to the deduction for commuting costs, there is an exclusion from personal income up to a cap, for certain commuter benefits provided by an employer to an employee. The Massachusetts exclusion amounts for 2024 were capped at:

• $315 per month for employer-provided parking, and
• $315 per month for combined transit pass and commuter highway vehicle transportation benefits.

The Massachusetts exclusion amounts for 2025 are capped at:

• $325 per month for employer-provided parking, and
• $325 per month for combined transit pass and commuter highway vehicle transportation benefits.

If an employer pays for your transit or parking pass, the amount by which the value of the pass exceeds the Massachusetts exclusion amount for a month is:

• Included in your income
• Reported as wages on your W-2.

Employers can also offer non-taxable benefits such as company cars, bike share programs, and mileage reimbursements. 

Pre-Tax Savings on Commuter Costs

To get tax savings on commuter costs through your employer, you can enroll in your employer's commuter benefits program. This allows you to set aside pre-tax dollars for eligible commuting expenses such as commuter highway vehicle rides, transit passes, and qualified parking.

How it works:

1. Your employer signs up with a third-party benefits provider.
2. You enroll in the program through your employer.
3. Your employer deducts your chosen amount from your paycheck pre-tax.
4. You can use your benefits debit card or pay out of pocket and then file a claim for reimbursement.