Aaaand now that you have that popular ’90s line dance song stuck in your head, we’ll get to our regularly scheduled blog.
With all those super cool Teslas rolling the roads (in creepy silence, sorry Elon), it was inevitable that transferees and assignees would start to request reimbursement for public battery charging fees for their electric cars when used for relocation- and assignment-related activities.
While most U.S. Domestic relocation and long term assignment expenses are now taxable, including mileage, the tax treatment of these expenses is pretty cut and dried, even though the IRS doesn’t seem to have addressed the whole electric-vehicle-public-charging-fee thing within the tax code just yet. In the meantime, a number of other questions on the subject have arisen including: “What amounts are reasonable to be reimbursed?” “Should we add language to our policies?” and “What is the best approach to accurately track and report on them?”.
As far as employee reimbursement for said charges go, Weichert’s current client base is taking the approach that these fees, in lieu of conventional vehicle mileage, are reimbursable along with other mobility related expenses for travel attendant to relocations and assignments. And, because public charging rates vary so widely, for now companies are simply reimbursing these charges at whatever the actual rate is. Our experts agree that this, as long as it is reasonable for the area, is the best practice approach at this time.
On the question of whether to add policy language regarding this benefit, this is a fairly low impact issue, so we’re also taking a common-sense approach here.
For clients in the process of a policy development effort, we’re presenting the concept and including the corresponding language for their consideration. That language includes a qualifying “reasonable and customary for the area” which promotes cost containment even while standards are still being established. Companies who are more cost conscious may also elect to cite a maximum amount as they gather more data on area norms.
For clients with existing policies not in the development process, we’re simply recommending that a mention be included in the initial counseling session and a policy change be wrapped in with their next overhaul effort.
That leaves the question of how it should be tracked. Conventional wisdom tells us that it must be tracked independently from actual mileage, especially in systems that automatically calculate the total dollar amount of a mileage reimbursement utilizing the number of miles driven and a specific rate that is stored in the system.
And if history has taught us anything, we know that someday, someone (probably the IRS) will want to know how many transferees sought these reimbursements, what the average amount was and what the cost per mile was so, as much as we love a good research project, there’s nothing quite like having that data right at your fingertips and so we’ve modified our tracking methodology accordingly.
Guess there is sometimes something new under the sun after all.