December 22, 2022
Massachusetts exclusion amounts for transportation fringe benefits to conform to the federal limits starting in 2023
The Massachusetts Department of Revenue announced in TIR 22-15 that beginning in 2023, the law conforms to the federal Internal Revenue Code (IRC) in determining the tax-free limit that applies to employer-provided parking, transit passes and commuter highway vehicle benefits.
Accordingly, effective January 1, 2023, the Massachusetts monthly exclusion for employer-provided parking is $300 and $300 for the combined total of transit pass and commuter highway vehicle benefits. (See IRS Revenue Procedure 2022-38 and EY Tax Alert 2022-1636.)
Ernst & Young, LLP insights
Massachusetts conformity with the IRC in determining the taxable exclusion for transportation fringe benefits will simplify Massachusetts state income tax withholding calculations for employers and lower Massachusetts personal income taxes for employees receiving these benefits.
Published by NTD’s Tax Technical Knowledge Services group; Carolyn Wright, legal editor
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