Quick Answer
Mileage reimbursements paid under an IRS accountable plan at or below substantiated business miles are generally not taxable income to employees. Allowances without substantiation or excess payments become taxable wages.
Direct answer
Mileage reimbursements paid under an IRS accountable plan at or below substantiated business miles are generally not taxable income to employees. Allowances without substantiation or excess payments become taxable wages.
Tax-free requires accountable plan compliance. Non-accountable car allowances reported as wages on W-2.
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