Recognizing the significant surge in gasoline prices, the Internal Revenue Service (“IRS”) recently announced that as of July 1, 2022, and for the remainder of 2022, it will make “a special adjustment” to its optional standard mileage rates. For the final six months of 2022, the special mileage rates will be:
IRS commissioner Chuck Rettig explained, “We are aware a number of unusual factors have come into play involving fuel costs, and we are taking this special step to help taxpayers, businesses and others who use this rate… The IRS is adjusting the standard mileage rates to better reflect the recent increase in fuel prices.”
Note that the “special” rates have no impact on miles driven between January 1, 2022, and June 30, 2022 (the special rates will apply only to the final six months of 2022). The optional IRS standard mileage rates for miles driven during the first six months of 2022 remain:
Remember that employers are required to reimburse employees for work-related mileage, other than the usual commute to and from work. Additional miles traveled throughout the work day other than the normal commute must be reimbursed. Reimbursement must include all travel-related costs (including fuel, insurance, repairs and depreciation). Note that providing employees with a fuel card does not cover all required travel costs.
Employers may choose to pay rates lower than the IRS mileage rate, as long as the lower rates fully compensate the employee for all travel-related costs (again, this must include fuel, insurance, repairs and depreciation). It is much easier to use the established IRS mileage rates, because these rates are deemed to be reasonable and sufficient reimbursement as a general rule. Using the IRS rate saves employers and employees alike from exerting extra time and effort to track and compute the actual costs associated with each employee’s business use of a personal vehicle.
For further information regarding employee expenses or other employment law issues, contact the attorneys at LightGabler. For questions regarding arbitration agreements or to address other employment law issues, contact the attorneys at LightGabler.