Most employers reimburse their employees for work-related use
of their own cars at or near the mileage rate set each year by the IRS. Use
or an amount at or below the IRS rate eliminates the need to maintain extensive
records in order to exclude the reimbursement from employees' taxable income.
Employees still have to provide specific information about the business use
of their cars. For employees who use their own cars extensively, more complex
reimbursement programs may be implemented to encourage cost reductions. Employers
should require employees who use their own cars for business to provide proof
of insurance coverage.
Summary for [Your State]