| Date: | 11/28/2022 |
|---|---|
| Referenced Sources: | Massachusetts General Laws |
This Technical Information Release (“TIR”) explains recent changes to the Massachusetts personal income tax exclusion amounts for employer-provided parking, transit pass and commuter highway vehicle benefits allowed to employees for taxable years beginning in 2022. This TIR repeals and replaces TIR 21-12.
Internal Revenue Code (“IRC”) § 132(f) excludes from an employee’s gross income employer-provided parking, transit pass and commuter highway vehicle transportation benefits, subject to a monthly maximum. IRC § 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. Under prior law, Massachusetts conformed to IRC § 132(f) as amended and in effect on January 1, 2005, resulting in different annual exclusion amounts for Massachusetts and federal income tax purposes. New legislation has amended Massachusetts General Laws chapter 62, § 1(c) so that for personal income tax purposes, Massachusetts now follows the provisions of the IRC as amended and in effect on January 1, 2022 for taxable years beginning on or after January 1, 2022.[1]
Due to the change in law, for taxable years beginning on or after January 1, 2022 Massachusetts conforms to IRC § 132(f) as amended and in effect on January 1, 2022. For the taxable year beginning January 1, 2022, the Massachusetts maximum monthly exclusion amounts are now the same as the federal exclusion amounts: $280 for employer-provided parking and $280 for combined transit pass and commuter highway vehicle transportation benefits.[2]
/s/Geoffrey E. Snyder
Geoffrey E. Snyder
Commissioner of Revenue
GES:RHF:wem
November 28, 2022
TIR 22-13
[1] Massachusetts Fiscal Year 2023 Budget, St. 2022, chapter 126.
[2] See IRS Revenue Procedure 2021-45. Transit pass and commuter highway vehicle transportation benefits are combined for purposes of sharing the $280 maximum monthly exclusion. For example, if an employee receives a $200 monthly transit pass and a $100 monthly commuter highway vehicle transportation benefit, the $20 excess would be includable in the employee’s wages for income and employment tax purposes.