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Technical Information Release

Technical Information Release  TIR 22-15: Massachusetts Exclusion Amounts for Employer-Provided Parking, Transit Pass and Commuter Highway Vehicle Benefits for Taxable Years Beginning in 2023

Date: 12/06/2022
Referenced Sources: Massachusetts General Laws

Table of Contents

I. Introduction

This Technical Information Release (“TIR”) provides 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 2023.

For taxable years beginning in 2023, the federal monthly exclusion amounts are $300 for employer-provided parking and $300 for transit pass and commuter highway vehicle benefits combined.[1]  The Massachusetts monthly exclusion amounts are also $300 for employer-provided parking and $300 for combined transit pass and commuter highway vehicle transportation benefits, as further explained below.

II. Discussion

In general, for purposes of determining Massachusetts gross income, the Massachusetts personal income tax laws follow the provisions of the Internal Revenue Code (“IRC”) as amended and in effect on January 1, 2022.[2]  Under prior law, Massachusetts conformed to the IRC as amended and in effect on January 1, 2005, resulting in different annual exclusion amounts under IRC 132(f) for Massachusetts and federal income tax purposes.  New legislation 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.[3]

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.  Accordingly, the Massachusetts maximum monthly exclusion amounts for taxable years beginning in 2023 are the same as the federal exclusion amounts: $300 for employer-provided parking and $300 for combined transit pass and commuter highway vehicle transportation benefits.[4]

 

                                                                                    /s/Geoffrey E. Snyder
                                                                                    Geoffrey E. Snyder
                                                                                    Commissioner of Revenue

 

GES:RHF:wem

December 6, 2022

TIR 22-15

 

[1] IRS Revenue Procedure 2022-38, October 18, 2022: https://www.irs.gov/newsroom/irs-provides-tax-inflation-adjustments-for-tax-year-2023

[2] G.L. c. 62, § 1(c).

[3] Massachusetts Fiscal Year 2023 Budget, St. 2022, chapter 126.

[4] See IRS Revenue Procedure 2022-38. Transit pass and commuter highway vehicle transportation benefits are combined for purposes of sharing the $300 maximum monthly exclusion.  For example, if an employee receives a $250 monthly transit pass and a $100 monthly commuter highway vehicle transportation benefit, the $50 excess would be includable in the employee’s wages for income and employment tax purposes.

Referenced Sources:

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