MassCommute News

Massachusetts Commuter Deduction

A deduction is allowed for certain amounts paid by an individual for tolls paid for through a FastLane account or for weekly or monthly transit commuter passes for MBTA transit or commuter rail, not including amounts reimbursed or otherwise deductible. In the case of a single person or a married person filing a separate return or a head of household filing a separate return, this deduction applies only to the portion of such expended amount that exceeds $150, and the total amount deducted cannot exceed $750. In the case of a married couple filing a joint return, this deduction applies only to the portion of such amount expended by each individual that exceeds $150, and the total amount deducted cannot exceed $750 for each individual. Also, one spouse cannot transfer his or her excess deduction to the other spouse; separate worksheets must be completed to calculate the deduction.   For a copy of the worksheet to calculate the commuter deduction please click here for the 2004 Massachusetts Income Tax Booklet and go to page 20.

2005 Pre-tax Limits for Transportation Fringe Benefits

The IRS code Section 132 (f) sets limits on the amount of money an employee may use on a monthly basis to pay for commuter transportation expenses.   In 2005, you may set aside up to $105/month on a pre-tax basis to pay for transit expenses (e.g. rides on the MBTA, vanpooling, or private bus carriers) and/or up to $200/month for costs associated with parking*. You have the ability to elect both mass transit and parking expenses each month if these expenses are considered qualified.  For instance, a park and ride situation where you park at a MBTA parking lot in order to take the subway to work would be considered a qualified expense (the T fare would count toward the $105 transit limit, the parking fee would count toward the $200 parking limit).  In order to receive these benefits you must purchase your transit pass or parking directly through your employer.  Expenses paid out of your own pocket directly to a parking operator or transit provider do not qualify.
*Note:  The IRS may change the amount that is allowed to be tax-free on an annual basis.

To learn more about MassCommute, please visit the MassCommute website at www.masscommute.com.

MassCommute is a group of Massachusetts Transportation Management Associations (TMAs), which leverage public and private funds to increase the use of ridesharing and other commuting alternatives that reduce traffic congestion and imporve air quality across the state. As membership organizations, TMAs operate in specific geographic areas to influence transportation policies and create programs for TMA member employers, institutions, governmental organizations, and commerical property owners. More than 250 businesses, schools, and organizations belong to the thirteen TMAs that provide services for more than 300,000 commuters in urban and suburban areas.