Parking Reimbursements

Parking expenses are costs incurred while parking during business travel. These expenses are not included in standard mileage reimbursement rates.

Instead, parking can be reimbursed separately on a tax-free basis using the actual expenses method outlined in IRS Publication 463. The same approach applies to similar costs, such as tolls.

Because parking reimbursement is not tied to mileage, it needs to be tracked and recorded separately. To qualify for tax-free reimbursement, drivers should:

• Keep a record of parking tied to business trips
• Retain receipts or other supporting documentation

It’s also important to distinguish between business and personal use. Parking at an employee’s regular place of work is considered a commuting expense and is not eligible for tax-free mileage reimbursement under IRS rules.

Parking expenses can be reimbursed alongside programs like Fixed and Variable Rate (FAVR), Tax-Free Car Allowance (TFCA), and Cents-Per-Mile (CPM), as long as proper documentation is maintained.