Exclusions from Gross Income

Fiscal Year 2015 Resource Summary (in Millions)
TAX EXPENDITURE	FY2011	FY2012	FY2013	FY2014	FY2015
Exclusions from Gross Income	3,194.0	3,299.6	3,561.1	3,786.7	3,961.5

View tax item language

item	description	amount
Exclusions from Gross Income		3,961.5
1.001	Exemption of Premiums on Accident and Accidental Death Insurance ¹	25.2
1.002	Exemption of Premiums on Group-Term Life Insurance ¹	21.4
1.003	Exemption of Interest on Life Insurance Policy and Annuity Cash Value	219.9
1.004	Exemption of Employer Contributions for Medical Insurance Premiums and Medical Care ¹	962.3
1.005	Exemption of Annuity or Pension Payments to Fire and Police Personnel	N.A.
1.006	Exemption of Distributions from Certain Contributory Pension and Annuity Plans ²	323.5
1.007	Exemption of Railroad Retirement Benefits	4.7
1.008	Exemption of Public Assistance Benefits	200.3
1.009	Exemption of Social Security Benefits	880.3
1.010	Exemption of Workers' Compensation Benefits	6.5
1.011	Exemption for Dependent Care Expenses ¹	11.5
1.012	Exemption of Certain Foster Care Payments	3.1
1.013	Exemption of Payments Made to Coal Miners	Negligible
1.014	Exemption of Rental Value of Parsonages ¹	2.9
1.015	Exemption of Scholarships and Fellowships	21.0
1.016	Exemption of Certain Prizes and Awards	N.A.
1.017	Exemption of Cost-Sharing Payments	Negligible
1.018	Exemption of Meals and Lodging Provided at Work ¹	13.2
1.019	Treatment of Business-Related Entertainment Expenses ¹	N.A.
1.020	Exemption of Income from the Sale, Lease, or Transfer of Certain Patents	N.A.
1.021	Exemption of Capital Gains on Home Sales	319.9
1.022	Nontaxation of Capital Gains at Death	731.7
1.023	Exemption of Interest from Massachusetts Obligations	69.8
1.024	Exemption of Benefits and Allowances to Armed Forces Personnel ¹	25.7
1.025	Exemption of Veterans' Pensions, Disability Compensation and G.I. Benefits	32.0
1.026	Exemption of Military Disability Pensions	0.5
1.027	Exemption of Compensation to Massachusetts-Based Nonresident Military Personnel	9.4
1.028	Exemption for Taxpayers Killed in Military Action or by Terrorist Activity	N.A.
1.029	Exemption for Retirement Pay of the Uniformed Services	25.5
1.030	Parking, T-Pass and Vanpool Fringe Benefits	40.6
1.031	Health Savings Accounts	included in 1.422
1.032	Employer-Provided Adoption Assistance	$0.0
1.033	Employer-Provided Educational Assistance	10.6
1.034	Qualified Retirement Planning Services	N.A.
1.035	Department of Defense Homeowners Assistance Plan	N.A.
1.036	Survivor Annuities of Fallen Public Safety Officers	N.A.
1.037	Survivor Annuities of Fallen Astronauts	N.A.
1.038	Discharge of Indebtedness for Victims of Terrorism	N.A.
1.039	Discharge of Indebtedness for Health Care Professionals	Negligible
1.040	Archer Medical Savings Accounts	included in 1.420

Key:

ORIGIN
IRC	Federal Internal Revenue Code (26 U.S.C.)
U.S.C	United States Code
M.G.L.	Massachusetts General Laws
Rev. Rul.; C.B.	Revenue Ruling; Cumulative Bulletin of the U.S. Treasury
ESTIMATES	All estimates are in $ millions.

Footnote(s):

¹ 1 This item and others citing this endnote cover employee fringe benefits. We accept as standard the following treatment of these benefits: the expense incurred by the employer in providing the benefit is properly deductible as a business expense and the benefit is taxed as compensation to the employee as if the employee had received taxable compensation and then used it to purchase the benefit. Of course, there are problems with this analysis. In some cases, the "benefit" is more a condition of employment than a true benefit. For example, a teacher required to have lunch in the school cafeteria may prefer to eat elsewhere even if the school lunch is free. On the other hand, in many cases the provision of tax-free employee benefits is clearly a substitution for taxable compensation.

² 2 This item and others citing this endnote cover contributory pension plans. The standard tax treatment of these plans is as follows: Component Standard Treatment Contributions: Made out of income that is currently taxed to employees. Investment Income: Taxed to the employee as "earned" income. Distributions from Pension Funds: Tax-free to the extent they are made out of dollars previously taxed to the employees as contributions or investment income. The non-standard treatment of contributions, investment income, or distributions as described in items 1.006, 1.101, 1.104, and 1.402, results in either nontaxation or deferrals of tax.