When employees use their vehicle for work-related travel, they may be entitled to gas mileage reimbursement. If the vehicle is owned by the company, and gas and maintenance on the vehicle are paid for by the company, no reimbursement is needed. For workers who use their own car, van, or truck to perform their duties, The IRS sets allowable reimbursement rates annually.
The Internal Revenue Service announced gas mileage reimbursement rates for 2020 in December.
For this year, the mileage rate in 2 categories have gone down from previous years:
- 57.5 cents per mile for business miles (58 cents in 2019)
- 17 cents per mile driven for medical or moving purposes (20 cents in 2019)
- 14 cents per mile driven in service of charitable organizations
Reimbursement rates cover all the costs related to driving for business. They are calculated to include gas, insurance, plus wear and tear on the vehicle. Employers who pay mileage reimbursement should not pay for gas and oil changes, as they’re covered under the overall cost.
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