Pennsylvania Unreimbursed Business Expenses Mileage
Employee Business Deductions Not Allowed For Pennsylvania Tax Purposes
- Expenses based upon federal per-diem allowances. (You may only deduct those expenses actually paid while performing the duties of your employment)
- Public transportation cost
- Commuting expenses
- Between different jobs for different employers
- Cost to drive a vehicle between your home and main work location
You did not incur an allowable business expense during the year if you:
- Received a fixed-mileage allowance or a per-diem allowance for the allowable business expense and your employer did not include the allowance in your compensation; or
- Accounted for your allowable expenses to your employer and your employer reimbursed you in the exact amount of your expenses.
Note: For tradesmen, commuting costs also include mileage for any job 35 miles or fewer from the closer of the union hall or personal residence to the jobsite.
It is recommended that you keep a log detailing your mileage activity when claiming unreimbursed business mileage expenses. Since there is no uniform or required reporting format. taxpayers are free to use any mileage log book, GPS programs or other documentation they are currently using. This sample business mileage report may be helpful if you need guidance.
If you travel a lot annual, the department recommends recording the following:
- Odometer readings on the first day a vehicle is used for business driving purpose and last day a vehicle was used for business purposes in given year. (Jan. 1 through Dec. 31)
- For each business trip, record the date, starting location, starting mileage, end mileage and total miles driven for business purposes. Log entries should also include a brief description of each trip. Only job-related mileage can be deducted. Personal errand conducted while on a business trip must be subtracted from the overall trip mileage.
Important: If your employer pays you more than the standard IRS rate, the extra amount is taxable compensation and must be added to your wages and other compensation.
EXAMPLE 1: James is regional manager for a chain of retail stores. He is required by his employer to drive his personal vehicle when visiting each retail location within his region at least one time per month. James’ employer reimburses him at a rate of $0.40 per mile and provides a lunch per diem of $8.00 per travel day. James is not permitted to deduct a mileage expense on his PA Schedule UE for the difference between the federal allowance, his employer’s reimbursement or an expense for meals while traveling to visit the retail locations within his region unless his employer includes the reimbursements in his PA compensation.
EXAMPLE 2: Jane is regional manager for a chain of retail stores and is required by her employer to drive her personal vehicle and visit each retail location within her region at least one time per month. Jane’s employer does not reimburse her for travel, but does provide a lunch per diem of $8.00 per travel day. Jane is permitted to deduct the actual business mileage expense on her PA Schedule UE. However, since Jane’s employer provided a per diem for lunch while she was traveling, she cannot claim any meals and entertainment expenses.
- If your reimbursement is more than your actual expenses, you must report the excess as taxable compensation on Line 1a of your PA-40 tax return.
- A taxpayer and spouse must keep separate records and schedules for each job or position when claiming unreimbursed business expenses.