Learn about the commuter deduction

This page will tell you what you need to know about the commuter deduction.

Overview

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

  • Tolls paid through an E-ZPass MA account or
  • The cost of weekly or monthly passes for:
    • MBTA transit 
    • Bus 
    • Commuter rail or
    • Commuter boat.

Deductions

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 joint, 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.

Employer reimbursement

Any amount paid must be reduced by any amount reimbursed, or otherwise deductible. The commuter deduction is allowed only if the amount isn't otherwise deducted. Where transportation costs 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.

The Massachusetts exclusion amount is:

  • $250 per month for employer-provided parking, and
  • $130 per month for combined transit pass and commuter highway vehicle transportation benefits.

If an employer pays for your MBTA pass, the amount by which the value of the pass exceeds $130 a month is:

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

To calculate the deduction in these circumstances:

  • Deduct the $130 a month 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.

Employee Payment by Payroll Reduction:

  • When you pay for a MBTA pass through payroll reduction, the total cost of the pass is eligible for the Massachusetts deduction, assuming all other requirements are met.

Transportation fringe benefits

A federal and Massachusetts exclusion is allowed for:

  • Employer-provided parking
  • Transit pass and
  • Commuter highway vehicle transportation benefits.

These exclusions are subject to monthly maximums.

Combined transit pass and commuter highway vehicle transportation benefits were formerly referred to as:

  • Employer-provided vanpool benefits and
  • Transit passes.

Based on IRS' Revenue Procedure/inflation adjustment formula, the Massachusetts exclusion amounts for tax years 2014 and 2015 are:

  • $250 per month for employer-provided parking; and
  • $130 per month for combined transit pass and commuter highway vehicle transportation benefits, that are a reduction in salary.

The federal monthly exclusion amount for tax year 2014 (tax year 2015 is not yet determined) for combined transit pass and commuter highway vehicle transportation benefits was increased to $250 by the Tax Increase Prevention Act of 2014 (P.L. 113-295.) Massachusetts does not adopt this exclusion amount increase to the transit pass and commuter highway vehicle transportation benefits, given that it was enacted subsequent to January 1, 2005.

Massachusetts adopts this federal exclusion under the Internal Revenue Code, as amended and in effect on January 1, 2005. Any federal tax law changes to these exclusions will not be automatically adopted. Massachusetts will continue to follow the Code of January 1, 2005. Massachusetts does, however, adopt the IRS's Revenue Procedure/inflation adjustment formula used in determining annual exclusion amounts.

Passes that are eligible for deduction

Passes that are eligible for the deduction include:

  • Any MBTA commuter pass or CharlieCard that is designated a 1-day, 7-day, and monthly passes
  • The MBTA commuter rail 1-day, 7-day, and monthly passes
  • The MBTA express bus or commuter boat passes.

Tolls and passes that aren't covered:

  • Regional transit authorities
  • Charlie Tickets that have been sold by the MBTA to replace payment by tokens or cash.

Deduction worksheets

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 amount allowable, multiply the amount of this deduction by the ratio in Massachusetts Form 1-NR/PY, Line 2, 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 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.

Documentation to Submit with Abatement/Amended Tax Return

To complete an abatement or amended tax return, you must submit the following form:

  • Copy of Form 1040 - U.S. Individual Income Tax Return (Page 1) or
  • Form 1040X - Amended U.S. Individual Income Tax Return.

Dependents claimed on your income tax returns

The deduction is allowed if:

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

The total amount can't exceed $750 for per person.

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 is $1,500.

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

  Husband Wife
  for Himself and Dependent for Herself
Amount Paid: $1,200 $550
Less: ($150) ($150)
Deduction Amount Before Limitation: $1,050 $400
     
     
  Husband Wife
Deduction Amount With Limitation: $750 $400

Keeping Record of Commuter Costs

To substantiate allowable-commuting costs, please keep records of:

  • Monthly passes 
  • FastLane reports
  • Credit card statements
  • Bank statements 
  • Pay stubs, and
  • Similar statements and receipts.

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