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December 21, 2021
2021-2291

Federal mileage rates and luxury vehicle limit increase for 2022

Effective January 1, 2022, the business standard mileage rate for use of a car (including vans, pickup trucks, and panel trucks) increases from $0.560 to $0.585 and the rate for medical and relocation mileage increases from $0.160 to $0.180. Mileage related to charity is set by law and remains at $0.14 per mile. (Notice 2022-03; Notice2021-02.)

It is important to note that under the Tax Cuts and Jobs Act, effective for tax years 2018 through 2025, taxpayers cannot claim a miscellaneous itemized deduction for unreimbursed employee travel expenses. Taxpayers also cannot claim a deduction for moving expenses, except members of the Armed Forces on active duty moving under orders to a permanent change of station.

For the rates and limits applicable in 2021 see our special report.

Luxury vehicle limitation for 2022

Pursuant to the vehicle valuation limit that applies to use of the optional fleet-average and vehicle cents-per-mile valuation methods, the maximum fair market value of the vehicle (including trucks and vans) first made available to employees in calendar year 2022 increased from $51,100 to $56,100.

Summary of mileage rates: 2021 compared to 2022

Type of mileage

Effective

January 1, 2021

Effective

January 1, 2022

Business standard

$0.560

$0.585

Charity

$0.140

$0.140

Relocation and medical

$0.160

$0.180

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Contact Information
For additional information concerning this Alert, please contact:
 
Workforce Tax Services - Employment Tax Advisory Services
   • Kristie Lowery (kristie.lowery@ey.com)
   • Kenneth Hausser (kenneth.hausser@ey.com)
   • Debera Salam (debera.salam@ey.com)
Compensation and Benefits
   • Christa Bierma (christa.bierma@ey.com)

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