Qualified Business Use

Qualified business use refers to driving that meets IRS criteria for business-related travel and is eligible for tax-free mileage reimbursement.

This typically includes trips like traveling to client meetings, visiting job sites, or driving between work locations. The IRS defines which types of travel qualify, and only these miles can be reimbursed under a compliant vehicle reimbursement program.

Not all driving for work qualifies. For example, commuting between an employee’s home and primary workplace is considered personal use and is not eligible for tax-free reimbursement.

Qualified business use is also used to calculate a vehicle’s business use percentage. This determines what portion of total driving is eligible for reimbursement, with the remaining portion classified as personal use.

In programs like Fixed and Variable Rate (FAVR), reimbursement is based only on qualified business use. Because of this, accurate and consistent mileage tracking is essential to ensure compliance and proper reimbursement.