From our partner GTM:
Beginning on Jan. 1, 2023, the standard mileage rates for the use of a car (also vans, pickups, or panel trucks) increased to 65.5 cents per mile driven for business use, up 3 cents from the midyear increase setting the rate for the second half of 2022. In recognition of gasoline price increases, the IRS made this special adjustment for the final months of last year.
These rates apply to electric and hybrid-electric automobiles, as well as gasoline and diesel-powered vehicles.
Important To Note
While federal law does not require you to reimburse your employees for mileage, in some states like California; Illinois; Massachusetts; and Washington, D.C. it is legally required to reimburse your employee for the miles they drive in their own vehicle while on the job. And that would be at the IRS Standard Mileage Rate. Even outside of those states it is a best practice to pay your nanny for mileage based on the IRS standard rate.
Your nanny’s commute to and from your home does not count toward their mileage reimbursement.Gas and mileage reimbursement is not taxable compensation so there is a financial advantage to using the IRS standard mileage rate.
Read the full announcement here on GTM’s website.