Massachusetts Employee Business Expenses

Employees may deduct certain expenses connected to their employment.

Updated: April 24, 2024

Impact of Itemization on the Federal Return

 

Some Massachusetts employee business expense deductions may only be claimed if the employee itemizes deductions for federal tax purposes.  On this page, these deductions are referred to as “itemized deductions.”

Other Massachusetts employee business expense deductions are available for qualified expenses regardless of whether the employee itemizes deductions for federal tax purposes.  On this page, these deductions are referred to as “nonitemized deductions.”

Nonitemized Deductions From MA Gross Income for Employee Business Expenses

Certain employees are allowed deductions from Massachusetts gross income for the following qualifying, unreimbursed employee business expenses under Internal Revenue Code (“Code”) § 62(a)(2)(B)-(E) in effect on January 1, 2022:    

• Eligible performing artists may deduct from Massachusetts gross income qualifying expenses allowed as federal deductions.  Go to IRS Form 2106 (employee business expenses).
• State or local government employees compensated on a fee-basis may deduct from Massachusetts gross income qualifying expenses allowed as federal deductions.  Go to IRS Form 2106.
• Eligible educators may deduct from Massachusetts gross income qualified expenses allowed as federal deductions.  Go to TIR 23-5: Chapter 62 Conformity to Select Provisions of the 2022 Internal Revenue Code and IRS Topic No. 458 (educator expense education).
• National Guard and armed forces reserve members may deduct from Massachusetts gross income certain expenses allowed as federal deductions.  Go to IRS Form 2106.

For tax years 2026 and later, employees can deduct from Massachusetts gross income, to the same extent as allowed under Code § 62(a)(2)(A) in effect on January 1, 2022, their employee business expenses that are reimbursed under an employer’s reimbursement or other expense allowance arrangement. See IRS Publication 463 (Travel, Gift, and Car Expenses) for more information.  If these reimbursements are not included in employees’ W-2 wages, then employees may not claim deductions for them.

All of the deductions described above can be claimed by a taxpayer on their Massachusetts return regardless of whether the taxpayer has itemized deductions on their federal return.  Massachusetts will not conform to changes enacted after January 1, 2022 to these federal deductions allowed under Code § 62(a)(2). 

  

Itemized Deductions From MA Gross Income for Employee Business Expenses

The deductions described below may not be taken for Massachusetts tax purposes for tax years 2018 through 2025. 

Employees who itemize their deductions may deduct from their Massachusetts gross income certain expenses connected to their employment that qualify under M.G.L. c. 62, § 2(d)(2).  To qualify, expenses must be deductible under Part VI of the Code currently in effect.  Qualifying expenses may include:

• Travel and transportation expenses for work
• Expenses for lodging and meals that are incurred on overnight business travel
• Transportation from a first job to a second job
• Job-seeking expenses if travel related and only if incurred seeking employment in the same field
• If an employee does not use the standard mileage rate, operating expenses incurred for automobiles used in a trade or business such as:
  • Expenses for gasoline
  • Oil
  • Tires
  • Repairs
  • Insurance
  • Depreciation
  • Parking fees and tolls
  • Licenses
  • Garage rent
• If the employee is a salesperson who solicits business for an employer away from the employer's place of business:
  • An in-home office
  • A home computer
  • Business telephone expenses

Generally, to deduct these expenses, they must be unreimbursed, unless the employer included reimbursement in the employee’s taxable income.

Go to IRS Form 2106, IRS Publication 463, and IRS Publication 587 (business use of your home) for more information about these and other business expenses that may be deductible.

To claim these deductions, the employee must:

1. Itemize deductions on their federal return
2. If filing a joint federal return, file a joint Massachusetts return and
3. Have qualified employee expenses that, combined with other miscellaneous itemized deductions as defined by Code § 67(a) as currently in effect, exceed 2% of the taxpayer’s federal adjusted gross income.  For employees with physical or mental disabilities, this 2% floor does not apply to impairment-related business expenses that qualify under G.L. c. 62, § 2(d)(2).  For example, transportation expenses that are deductible under G.L. c. 62, § 2(d)(2) and that are also impairment-related are not subject to the 2% floor.       

Deductions for expenses that are disallowed for tax years 2018 through 2025 are not so disallowed if they are also impairment-related business expenses.  Go to IRS Form 2106 and IRS Publication 463 for what qualifies as an impairment-related business expense.

The amount of the Massachusetts deduction allowed under G.L. c. 62, § 2(d)(2) depends on the amount deducted on a federal return for the current taxable year as allowed by Code § 67(a) and Part VI of the Code.  For that reason, for the purposes of the Massachusetts deduction allowed under G.L. c. 62, § 2(d)(2), Massachusetts conforms on a current basis to Code § 67(a) and Part VI of the Code.

Additional Resources

Massachusetts References

• M.G.L. Chapter 62, Sections 1(c) as amended by St. 1998, c. 175, s. 6
• M.G.L. Chapter 62, Sections 2(d)(2)
• DD 86-14: Employee Job Seeking Expenses
• TIR 23-5: Chapter 62 Conformity to Select Provisions of the 2022 Internal Revenue Code

Federal References

• Code §§ 62(a)(2); 162(p); 274(m), (n)

This page has been updated on June 12, 2023