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Company $A$ is providing me relocation package of certain amount for every mile travelled for a certain total amount of miles. Say they pay me $X.
https://www.irs.gov/newsroom/irs-issues-standard-mileage-rates-for-2022
Will I be taxed next year off the $X or is the money they pay already taxed?
The IRS has done the unusual thing by upping the rates in the middle of the year becasue of inflation and gas prices.
IRS increases mileage rate for remainder of 2022
In recognition of recent gasoline price increases, the IRS made this special adjustment for the final months of 2022. The IRS normally updates the mileage rates once a year in the fall for the next calendar year. For travel from January 1 through June 30, 2022, taxpayers should use the rates set forth in Notice 2022-03
| Purpose | Rates 1/1 through 6/30/2022 | Rates 7/1 through 12/31/2022 |
|---|---|---|
| Business | 58.5 | 62.5 |
| Medical/Moving | 18 | 22 |
| Charitable | 14 | 14 |
The same notice includes this comment:
The optional business standard mileage rate is used to compute the deductible costs of operating an automobile for business use in lieu of tracking actual costs. This rate is also used as a benchmark by the federal government and many businesses to reimburse their employees for mileage.
Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.
This business rate is used to reimburse you for miles you drive for the company. In my career I have been reimbursed when I had to drive to a meeting in the middle of the day, or if I had to drive my own vehicle to another city for a trip that was going to last a few days.
If this is the situation you are asking about, then you are not taxed on the amount they reimburse you. In addition to the mileage for those trips they can also reimburse you for the parking and tolls. Again that would not be taxable income.
Check with you company for the specific form they use, and what proof you need to provide.
But you seem to be asking about moving expenses. Before the 2017 Tax changes moving expenses were either deductible, or if paid by the employer they were tax free. Again there were forms, proof, and tests but many people used this provision of the tax code.
Since the 2017 tax changes, the situation has changed.
The IRS has a Can I Deduct My Moving Expenses? tool
This is the key question:
Military Related
Did you move due to a military related issue?
If the answer is No. You get this response:
Can I deduct my moving expenses? You cannot deduct your moving expenses. The moving expense deduction has been temporarily suspended due to the Tax Cuts and Jobs Act of 2017.
If you answer Yes, then there are many more questions in the tool.
