Chapter 62B of the General Laws is hereby amended by adding the following section:-

Section 22. (1) An employer that implements a program enabling employees that currently work from the employer’s office or other physical facility located in the commonwealth to telecommute shall be allowed a credit against amounts withheld from wages by this chapter for the calendar year to the extent that the credit is authorized for that employer by the department of transportation.  For the purposes of this section, “telecommute” or “telecommuting” means the performance by an employee, who is a Massachusetts resident, of normal and regular work functions during the Monday through Friday workweek at a location different from the employer’s office or other physical facility located in the commonwealth and that is within or closer to the employee's residence. The department of transportation shall award the credit based on (i) the number of the employer’s employees that telecommute on or after January 1, 2022; (ii) the effectiveness and impact of the employer’s telecommuting program; and (iii) other standards developed by the department of transportation. The credit shall not exceed $500 per participating employee for the calendar year. An employer may claim the credit on the returns due under this chapter over the course of a calendar year in a form and manner determined by the commissioner.   

(2) An employer granted a credit under this section shall maintain records sufficient to demonstrate the number of its employees telecommuting pursuant to the program that generated the credit.

(3) The department of transportation, in consultation with the commissioner, shall promulgate regulations necessary to implement the credit, including provisions establishing an application process for employers.

(4) The secretary of transportation in writing shall authorize tax credits pursuant to this section. The total amount of credits that may be authorized in a calendar year pursuant to this section shall not exceed $12,500,000.  No credits shall be allowed under this section except to the extent authorized by the department of transportation. The commissioner shall adopt regulations for the administration of the tax credits. The department of transportation shall provide the commissioner with the documentation that the commissioner deems necessary to confirm compliance with the annual cap.

(5) This section shall be effective for tax years beginning before January 1, 2030, but credits allowed pursuant to this section may be carried forward after January 1, 2030.