Per diem Tax

Forum|Forum|11 months ago
April 23, 2025
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For 2024, my employer pays me a per diem of $69 per day (I live in California and am a truck driver). This amount is included in my salary. In my 2024 W2 form, my employer included in column 1 (wgs, tips, other compn) per diem for the entire year. My question is: should per diem be included in column 1 of the W2 form and if it should not be included, what is the legal basis for this?

Not A Product Question

DawnC

Employee

It depends on your employer's expense allowance policies and whether or not those policies are considered to be administered through an accountable plan or a non-accountable plan. See Pub 5137, page 4 for accountable plans and page 5 for Non-accountable plans. Basically, if you employer has an accountable plan, they are not taxable and not included in Box 1. Any plan that is not an accountable plan is a non-accountable plan, which is taxable to you and included in Box 1.

A nonaccountable plan is an allowance or reimbursement program or policy that does not meet all three requirements for an accountable plan. Treas. Reg. Section 1.62-2(c)(3)

Payments, including advances, reimbursements, allowances and so on, made under a nonaccountable plan are taxable wages subject to all withholding when paid or constructively received by an employee. Treas. Reg. Section 1.62-2(c)(5)

Employers may have multiple expense allowance policies and may have both accountable and nonaccountable plans for different types of reimbursements. Employers may establish more restrictive conditions for the plan than imposed by the IRS accountable plan requirements.

Employees cannot compel the employer to treat nonaccountable plan payments as if they were paid under an accountable plan. Treas. Reg. Section 1.62-2(c)(3)

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dvidevAuthor

Thanks for the answer. Please clarify how I can determine which plan my employer has chosen. Do I have to ask in a letter, or is there another way?

Vanessa A

The fact that your employer included it in your wages strongly indicates they treat it as a nonaccountable plan and the per diem/mileage should be taxed. If an employer is treating it as an accountable plan, they generally would not include it in your wages.

You can contact your employer to verify. It does not have to be in a letter.

If they treat it as an accountable plan, they would need to issue you a corrected W-2.

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