10-18: Commute travel expenses

Effective: January 1, 2026
Revised: May 13, 2026
References: IRS Publication 463, IRS Publication 587, 26 USC 280A(c)(1), Rev. Rul. 99-7, 10-6: Reimbursement requests, 23-1: Personal use of employer-provided vehicles

Purpose

This policy explains the guidelines and eligibility requirements for the reimbursement of commute travel expenses incurred by employees for commuting.

The primary focus of this policy is to establish guidance on the taxability of mileage and travel reimbursements. IRS regulations don’t mandate when an employer must reimburse an employee for travel expenses, but they do define the taxability of these reimbursements. This policy is intended to ensure compliance with IRS requirements.

This policy is also written considering the Governor’s directive for employees residing within 50 miles to return to the office at least 2 days per week.

Definitions

Administrative office – The state building officially assigned to an employee for reporting and supervisory functions.

Commissioner – The executive leader of an agency.

Commuting – Travel by an employee between their residence and their administratively assigned office.

Designee – The person who has written permission from the commissioner to act on the commissioner’s behalf.

GovOps – The Department of Government Operations.

High mileage rate – The GSA per diem rate labeled, “If use of privately owned automobile is authorized or if no government-furnished automobile is authorized and available.”

Metropolitan Area – For the purposes of this policy, the metropolitan area is defined as the general area where an employee performs the majority of their daily work. Per IRS Publication 463, “[A] metropolitan area includes the area within the city limits and the suburbs that are considered part of that metropolitan area.” Therefore, a roaming employee’s metropolitan area is the city limits and recognized suburbs of their primary work location(s).

Payroll – The GovOps Division of Finance payroll team.

Principal place of business – A fixed location that’s used exclusively and regularly for substantial administrative or management activities.

Roaming employee – Employees who don’t report to their administrative office or have fixed working locations because their jobs require them to go to various temporary work locations.

State mileage rate – A calculated mileage rate rounded to the nearest tenth of a cent, based on the average of 2 per diem rates: (1) the rate labeled, “If use of a privately owned automobile is authorized or if no government-furnished automobile is available” and (2) the rate labeled “if a government-furnished automobile is available.” These rates are listed on the U.S. General Services Administration website.

Tax home – The entire city or general area (metropolitan area) where a place of business, employment, or post of duty is located, regardless of where the family home is maintained.

Policy

A – Employees must be assigned an administrative office

1 – All employees must be assigned an administrative office as their principal place of business based on the agency’s need, except as described in section D. The administrative office cannot be assigned in an attempt to try to avoid a taxable situation, like assigning an administrative office for the employee’s convenience.

2 – An employee’s home doesn’t qualify as their principal place of business due to the IRS’s convenience for the employer rule and the IRS’s stringent criteria under which a home office can qualify as an employee’s tax home.

B – Rules for employees who live within 50 miles of their administrative office

1 – Employees who live within 50 miles of their administrative office are not eligible for commute mileage reimbursements between their home and administrative office.

2 – Agencies may reimburse employees who live within 50 miles of their administrative office taxable commute mileage when they are required to commute round trip more than once per day.

C – Employees who live more than 50 miles from their administrative office may be reimbursed taxable commute mileage

1 – Agencies may reimburse taxable commute mileage for employees who live more than 50 miles from their administrative office to commute to their administrative office, but they are not required to.

D – Roaming employees have a different commute definition

1 – Because roaming employees don’t regularly go to their administrative office, use their home office exclusively for business or for the employer’s convenience, or work at a fixed job site, they don’t meet the IRS’s requirements for having a principal place of business.

2 – Roaming employees must consider their daily travel between their home and their first work location within their metropolitan area and the travel between their last work location within their metropolitan area and their home as their commute.

2a – For example, a state inspector lives in Sandy and drives daily to different state buildings within the Salt Lake area. They commute from their home to a worksite in West Jordan. From there, they travel to a worksite in Salt Lake and then to another worksite in Murray. Then, the inspector commutes from Murray to their home in Sandy. Their commute for the day is the drive from Sandy to West Jordan and the drive from Murray to Sandy. The travel to and from the worksite in Salt Lake is business travel.

2a.1 – The same inspector travels to a worksite in South Ogden from their home, to another worksite in North Ogden, and then back home again. They don’t have a commute for the day because their first and last work location are outside of their metropolitan area.

3 – If commute mileage is reimbursed to these employees, it is taxable like all other commute mileage reimbursements and must be paid according to this policy.

3a – The 50 mile threshold established by the Governor’s directive is not applicable to employees without a principal place of business.

E – Employees who are approved to relocate may be reimbursed for commute travel

1 – If an employee is approved by their agency to relocate from their primary residence to a location more than 50 miles from their administrative office for the employee’s convenience, the agency must define the terms of commute travel and reimbursement with the employee.

1a – For example, an employee is hired and their primary residence is in Salt Lake County (within 50 miles of their office); later, at the employee’s request, they move to Washington County (more than 50 miles from their office). The agency must decide whether the agency or the employee pays the commute travel costs.

2 – Agencies are responsible for determining the commuting and travel expenses that the employee and/or agency will pay when the employee travels to their administrative office.

2a – Agencies may decide to have the employee be responsible for all costs, including situations involving overnight stays. The justification is that the remote work arrangement and subsequent travel are primarily for the benefit and convenience of the employee and not the operational needs of the agency.

3 – When an employee is responsible to cover any or all commute and travel costs, the agreement must be documented in writing and approved by the commissioner or designee. If an agency agrees to cover all of the costs, they will follow regular reimbursement procedures and no additional documentation is needed.

4 – This policy does not apply to involuntary employee relocations or moving expenses. See 1-7: Relocation allowances.

F – Agencies must have their own policy for commute travel expenses

1 – Agencies must have their own policy that defines when they will reimburse commute travel expenses, including the situations outlined in sections D and E. Agencies’ policies must comply with this policy.

2 – Agencies’ policies must ensure that:

commute travel reimbursements are fair and equitable and do not favor any employee or group of employees; and
policies and procedures are based on sound rationale and consistently followed.

G – Commute travel expenses are taxable

1 – All commute mileage is taxable regardless of the reason and/or their telework location.

2 – Other travel expenses incurred for commuting are also taxable, such as lodging, fleet and rental vehicles, and meal expenses, and agency booking fees.

3 – All travel expenses must be booked and reimbursed following policy section 10: Travel.

H – Commute travel reimbursements must be paid through Concur

1 – Employees are reimbursed commute travel expenses through Concur.

2 – Employees must identify commute trips in the Concur header. This allows the Concur team to report expenses to payroll as taxable.

3 – All travel expenses, including mileage, lodging, meal and incidental expenses, etc., in the Concur reimbursement request are taxable for commute trips.

4 – The Concur team will report the amounts paid to payroll so that they can be added to the employee’s taxable income.

5 – If an employee submits a commute travel reimbursement request in Concur without identifying the trip as a commute, agencies are responsible to report these expenses to payroll on form FI 48: Reimbursement and earning request as non-cash miscellaneous income by submitting a ticket to [email protected]. A copy of the reimbursement request must be attached to the FI 48.

6 – Agencies do not have to report travel expenses for same day trips because the Concur team already reports these expenses as taxable.

7 – If an employee was paid for a commute travel reimbursement request in Concur and it was later determined that the trip wasn’t a commute but regular business travel, agencies can adjust the expenses through payroll. Agencies must use a negative amount for non-cash miscellaneous income on the FI 48: Reimbursement and earning request and submit it to payroll by submitting a ticket to [email protected]. Documentation must be attached to the FI 48 that supports the amount and explains why the expenses weren’t taxable, including a copy of the reimbursement request. A justification simply saying that the expenses weren’t taxable isn’t sufficient.

7a – If a correction was made, the employee may see a difference in the withholding taxes, which will be resolved when the employee files their income taxes. The payroll system calculates the withholding taxes. The withholding taxes must not be adjusted by the payroll or Concur team.

8 – Agencies are responsible for ensuring that commute trips are properly identified.

I – In-state rental and fleet vehicle costs must be reported to payroll

1 – To determine the taxable amount of in-state rental and fleet vehicles used for commuting, see policy 23-1: Personal use of employer-provided vehicles.

1a – Most employees will qualify to use the IRS Commuting Rule; however, the agency is responsible to ensure the proper IRS rule is followed in determining the taxable amount.

2 – Employees can’t use the in-state rental or fleet vehicles for any personal use other than commuting or de minimis personal use that’s incidental to commuting, like going to a restaurant on lunch break or stopping for coffee on the way to work. This requirement must be followed so that the value can be calculated using the IRS Commuting Rule rate.

3 – The agency must directly pay for the rental vehicle either by the employee paying with a p-card or the vendor billing the agency.

4 – If the employee used a rental vehicle and the IRS Commuting Rule can’t be used, the actual cost of the rental vehicle will be the taxable value.

5 – Fuel reimbursements for commute travel are taxable.

6 – When employees pay for fuel with their p-card, the fuel isn’t taxable to the employee. This is because the agency is paying directly for the fuel, and it’s included in the IRS Commuting Rule rate.

7 – Agencies are responsible for reporting in-state rental and fleet vehicle costs to payroll by submitting form FI 29: Commute use authorization & payroll notification to the GovOps Division of Finance through a ticket to [email protected].

J – Employees that cannot use Concur use Vantage Financial

1 – Employees that cannot use Concur must be paid their commute travel reimbursement requests through Vantage Financial using:

the form FI 40: Mileage reimbursement for employees who are requesting reimbursement for their commute mileage expenses and no other commute travel expenses ; or
the form FI 51: Travel reimbursement request for employees requesting reimbursement for their commute mileage and other commute travel expenses; and
the necessary documentation listed in 10-6: Reimbursement requests.

2 – Commute travel reimbursement requests must be coded to object code 5125.

3 – Agencies must report these reimbursements to payroll by submitting a ticket to [email protected].

K – Agencies are responsible for ensuring that commute travel reimbursements meet IRS regulations

1 – Agencies are responsible for ensuring that employees’ commute travel reimbursements are handled properly and paid correctly. If an agency has a situation that is not addressed in this policy, they should consult with the GovOps Division of Finance and research IRS guidance to determine the proper handling.ments are handled properly and paid correctly. If an agency has a situation that is not addressed in this policy, they should consult with the GovOps Division of Finance and research IRS guidance to determine the proper handling.