Technical Information Release  TIR 25-9: Massachusetts Exclusion Amounts for Employer-Provided Parking, Transit Pass, Commuter Highway Vehicle and Bicycle Commuting Benefits for Taxable Years Beginning in 2026

Date:	12/23/2025
Referenced Sources:	Massachusetts General Laws

I. Introduction

This Technical Information Release (“TIR”) provides the maximum Massachusetts personal income tax exclusions for employer-provided parking, transit pass, commuter highway vehicle, and bicycle commuting benefits allowed to employees for taxable years beginning in 2026. It also explains the impact of recent federal legislation on the Massachusetts exclusion amounts. 

For taxable years beginning in 2026, the federal monthly exclusion amounts are capped at $340 for employer-provided parking and $340 for both transit pass and commuter highway vehicle benefits combined.^[1] There is no federal exclusion for bicycle commuting reimbursements. The Massachusetts monthly exclusion amounts are capped at $335 for employer-provided parking, $335 for combined transit pass and commuter highway vehicle benefits, and $20 for qualified bicycle commuting reimbursements.

II. Discussion

Internal Revenue Code (“IRC”) § 132(f) excludes from an employee’s gross income certain employer-provided transportation benefits, subject to a monthly maximum.  IRC § 132(f)(6) provides for an inflation adjustment to those monthly maximums for any taxable year beginning in a calendar year after 1999.  In general, for purposes of determining Massachusetts gross income, the Massachusetts personal income tax laws follow the provisions of the IRC as amended and in effect on January 1, 2024.^[2]  Accordingly, Massachusetts conforms to IRC § 132(f) as amended and in effect on January 1, 2024.

Under IRC § 132(f) as amended and in effect on January 1, 2024, the base year for the annual inflation adjustment was 1998.  For taxable years beginning on or after January 1, 2025, Public Law No. 119-21^[3] changed the base year from 1998 to 1997.  Massachusetts, however, will continue to use 1998 as the base year due to its conformity with the IRC as amended and in effect on January 1, 2024.  This may result in different federal and Massachusetts annual exclusion amounts for a given year, as is the case for 2026.  See Section I.

IRC § 132(f) previously provided for an exclusion for qualified bicycle commuting reimbursements. That exclusion was temporarily suspended by 2017 federal legislation^[4] from 2018 through 2025, and was then repealed in 2025 by Public Law No. 119-21.^[5]  However, because Massachusetts conforms to Code § 132(f) as amended and in effect on January 1, 2024, Massachusetts does not conform to the repeal and the exclusion for qualified bicycle commuting benefits will return on January 1, 2026. Accordingly, for taxable years beginning in 2026, the exclusion for qualified bicycle commuting reimbursements will be available in Massachusetts, capped at $20 per month or $240 per year with no annual inflation adjustment.^[6]

                                                                                   /s/Geoffrey E. Snyder
                                                                                    Geoffrey E. Snyder
                                                                                    Commissioner of Revenue
 
GES:RHF:wem

December 23, 2025

TIR 25-9

[1] See IRS Revenue Procedure 2025-32, October 9, 2025. Transit pass and commuter highway vehicle transportation benefits are combined for purposes of sharing the $340 maximum monthly exclusion. For example, if an employee receives a $260 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.

[2] G.L. c. 62, § 1(c).

[3] Public Law No. 119-21, § 70112, effective for taxable years beginning after December 31, 2025. Public Law No. 119-21 is also known as the “One Big Beautiful Bill Act,” enacted July 4, 2025.

[4] Public Law No. 115-97, also known as the “Tax Cuts and Jobs Act,” enacted on December 22, 2017.

[5] Public Law No. 119-21, § 70112, effective for taxable years beginning after December 31, 2025.

[6] IRC § 132(f)(5)(F)(ii).