This legislation seeks to simultaneously help Massachusetts commuters save money and incentivize the use of several modes of transportation, including public transit and bicycles.
An Act expanding access to commuter transit benefits offered by employers requires Massachusetts employers with 50 or more employees to offer a commuter transit tax benefit program, which employees can use to pay for transit services on a pre-tax basis. This program would save employers money on payroll taxes and would save employees money on income taxes.
Effectively, money that an employee would typically budget for transportation expenses would be deducted from their paychecks and put into a separate, untaxed account used specifically for certain transportation costs. These costs would be limited to public transportation offered by the MBTA or any Massachusetts regional transportation authority, as well as costs associated with cycling.
In the short term, this legislation will save employers and employees money. In the long term, this legislation will incentivize commuters to use transportation options that are more environmentally friendly and less congestive to Massachusetts roadways.
This legislation will be filed as Amendment 82 to the economic development bill being taken up by the Senate on July 21.
How can I receive these benefits?
The legislation directs the Executive Office of Labor and Workforce Development to prepare multilingual written materials about the program to share with qualifying employers, and the employers can share these materials with their employees. Anyone interested in receiving a commuter transit tax benefit can also proactively contact their employer to enroll in their workplace’s program. Once enrolled, beneficiaries would stipulate the amount of money to be deducted from their paycheck for transportation costs. This amount would regularly be deducted from each subsequent paycheck until an employee requests an adjusted amount to be deducted.
What types of expenses are covered?
All public transportation offered by the MBTA, including subway, Commuter Rail, bus, shuttle, and ferry service; all services offered by regional transit authorities throughout Massachusetts; and certain bicycle related expenses, including purchases of bicycles, bike improvements, repair, and storage.
Does my employer offer these benefits?
Under this legislation, all Massachusetts employers with 50 or more employees would be required to offer these benefits. Some Massachusetts employers already offer such programs. Not having 50 or more employees does not prohibit an employer from offering such a program. To learn more about your workplace’s benefits, contact your employer.