Here’s what HIVE AI had to say about “Are commuting costs deductible for remote workers returning to the office?”:
Commuting Costs for Remote Workers Returning to the Office
No, commuting costs for remote workers returning to the office are generally not deductible on your taxes. The IRS and tax courts have consistently maintained that commuting expenses between your home and regular workplace are considered personal expenses and are not deductible, regardless of whether you normally work remotely.
General Rule on Commuting Expenses
Traveling expenses incurred while away from home in the pursuit of a trade or business, including the trade or business of being an employee, are deductible, as are local transportation costs. Commuting expenses, however, are personal expenses and may not be deducted. Dawson U.S. Tax Court Opinions: Mary-Elizabeth D. Wallenius
The costs of traveling between a taxpayer’s home and work (i.e., commuting expenses) are personal and are not deductible business expenses. Dawson U.S. Tax Court Opinions: Cari Barnes
These costs are personal commuting expenses. You can’t deduct commuting expenses no matter how far your home is from your regular place of work. You can’t deduct commuting expenses even if you work during the commuting trip. IRS – Publication 463: Travel, Gift, and Car Expenses
The taxpayer’s costs of commuting to his place of business or employment are personal expenses and do not qualify as deductible expenses. Tresuary Reg. 1.262-1
Remote Workers and Commuting
For remote workers who occasionally return to the office, these trips are still considered commuting and are not deductible. The IRS has not created special exceptions for remote or hybrid workers who travel to their employer’s office location.
No deduction is allowed for any expense incurred for providing any transportation, or any payment or reimbursement, to an employee of the taxpayer in connection with travel between the employee’s residence and place of employment. The disallowance is not subject to the exceptions provided in section 274(e). The disallowance applies regardless of whether the travel between the employee’s residence and place of employment includes more than one mode of transportation, and regardless of whether the taxpayer provides, or pays or reimburses the employee for, all modes of transportation used during the trip. Tresuary Reg. 1.274-14
No deduction shall be allowed under this chapter for any expense incurred for providing any transportation, or any payment or reimbursement, to an employee of the taxpayer in connection with travel between the employee’s residence and place of employment, except as necessary for ensuring the safety of the employee. IRC § 274(l)
Exceptions That Might Apply to Remote Workers
While the general rule prohibits deducting commuting expenses, there are a few limited exceptions that might apply in certain situations:
1. Temporary Work Locations
Seemingly nondeductible commuting expenses may be deducted if the expense is for travel: (1) between a taxpayer’s residence and a temporary distant worksite; (2) from the taxpayer’s home office to a place of business; and (3) requiring the taxpayer to pay or incur additional costs to transport tools and materials from the taxpayer’s residence to a place of business. Dawson U.S. Tax Court Opinions: Daniel Campbell & Terri Campbell
Commuting expenses may be deductible when incurred between a taxpayer’s residence and a temporary worksite outside of the metropolitan area. Dawson U.S. Tax Court Opinions: Mohamed H. Elbasha
Reimbursements for transportation expenses between a residence and a work location are excludable from income if they are provided for: • Daily transportation between one work location and another, neither one being the employee’s residence. • Daily transportation between the employee’s residence and a temporary work location outside the metropolitan area where the employee generally works. • Daily transportation between the employee’s residence and a temporary work location in the same business (regardless of distance) if the employee has a regular work location away from the residence. IRS – Publication 5137: Fringe Benefit Guide
2. Home Office as Principal Place of Business
If your home office qualifies as your principal place of business, travel from there to other work locations may be deductible:
Daily transportation between the employee’s residence and another work location in the same business (regardless of whether the work location is temporary and regardless of distance), if the residence is the employee’s principal place of business (the residence is exclusively used on a regular basis for the convenience of the employer). IRS – Publication 5137: Fringe Benefit Guide
Because we determined that petitioner’s home office was not his principal place of business within the meaning of section 280A(c)(1)(A), he is not excepted from this general rule. Dawson U.S. Tax Court Opinions: Mohamed H. Elbasha
However, qualifying for the home office deduction is difficult for employees, as the home office must be for the convenience of the employer, not the employee:
It also cites Curphey v. Commissioner, 73 T.C. 766 (1980), for the proposition that daily transportation expenses between the taxpayer’s residence and other work locations are deductible if the residence is the taxpayer’s principal place of business within the meaning of section 280A(c)(1)(A) of the Code, for the trade or business conducted by the taxpayer at those other work locations. A has the burden of proving that his residence L was also his principal place of business. There is no documentary or other evidence in the record at this time to show that L was A’s principal place of business. IRS Determination-0435020
3. Building Closure or Alternate Work Site
Employees who work at an alternate work site outside of the commuting area of their official assigned duty station because of a building closure will be reimbursed for mileage that exceeds their normal commuting costs. Normal commuting costs are expenses that an employee would incur while commuting from their residence to the closed official assigned duty station and returning to their residence. IRS IRM 1.32.1 IRS Local Travel Guide
Working During Commute Doesn’t Change the Rule
Even if you work during your commute, the expenses remain nondeductible:
You can’t deduct commuting expenses even if you work during the commuting trip. Example. You sometimes use your cell phone to make business calls while commuting to and from work. Sometimes business associates ride with you to and from work, and you have a business discussion in the car. These activities don’t change the trip from personal to business. You can’t deduct your commuting expenses. IRS – Publication 463: Travel, Gift, and Car Expenses
Burden of Proof for Exceptions
Although there are exceptions to this general rule, a taxpayer typically bears the burden of proving that an exception exists permitting the deduction of commuting expenses. Petitioner did not allege that any such exception applies, and the record does not support a finding sufficient to invoke any such exception. Dawson U.S. Tax Court Opinions: Theodore James Zalesiak
Employer Reimbursements for Commuting
If your employer reimburses you for commuting expenses, these reimbursements are generally taxable income to you:
Also, no deduction is allowed for any expense incurred for providing any transportation, or any payment or reimbursement to your employee, in connection with travel between your employee’s residence and place of employment, except as necessary for ensuring the safety of your employee or for qualified bicycle commuting reimbursements, as described in section 132(f)(5)(F) (even though the exclusion for qualified bicycle commuting reimbursements is suspended, as discussed earlier). While you may no longer deduct payments for qualified transportation benefits, the fringe benefit exclusion rules still apply and the payments may be excluded from your employee’s wages, as discussed earlier. IRS – Publication 15-B: Employer’s Tax Guide to Fringe Benefits
Conclusion
For remote workers who occasionally return to their employer’s office, the trips between home and the office are considered commuting expenses and are not deductible. This is true regardless of:
- How frequently you work remotely
- How far you live from the office
- Whether you work during your commute
- Whether you use multiple modes of transportation
The only potential exceptions would be if:
- You’re traveling to a temporary work location outside your metropolitan area
- Your home qualifies as your principal place of business for tax purposes (which is difficult for employees to establish)
- You’re working at an alternate work site due to a building closure
If you believe one of these exceptions might apply to your situation, it would be advisable to consult with a tax professional who can evaluate your specific circumstances and help determine if any of your transportation expenses might be deductible.
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