Can employees deduct unreimbursed travel expenses?

The general rule

If you are an employee and your employer does not reimburse your travel, meals or driving, the publication says the cost of using your car as an employee, whether measured with actual expenses or the standard mileage rate, can no longer be claimed as an unreimbursed employee travel expense. That follows from the suspension of miscellaneous itemized deductions that were subject to the 2% floor. The suspension applies to tax years beginning after 2017. The publication states that deductions for expenses deductible in arriving at adjusted gross income are not suspended, and that distinction is the whole key to the exceptions below.

The four exceptions

Form 2106 is the employee business expense form, and for tax years after 2017 only four kinds of employees are listed as users: Armed Forces reservists, qualified performing artists, fee-basis state or local government officials, and employees with impairment-related work expenses. The first three deduct as an adjustment to total income on Schedule 1 (Form 1040), line 12, which is why the suspension does not reach them. Impairment-related expenses are reported on Schedule A, line 16. If you are not in one of the four groups, the publication says you may not use Form 2106.

Reservists and the 100-mile rule

A member of a reserve component who travels more than 100 miles away from home in connection with reserve service can deduct the travel as an adjustment to gross income. The amount is limited to the regular federal per diem rate for lodging and meals and incidental expenses, and the standard mileage rate for car expenses, plus parking fees, ferry fees and tolls. If the trip does not take you more than 100 miles from home, the publication says you cannot deduct it as an adjustment. The calculator above applies that threshold and cap to your own figures; it does not look up the federal per diem for you.

Fee-basis officials and performing artists

Fee-basis officials are state or local government employees paid in whole or in part on a fee basis, and they take their business expenses from Form 2106, line 10, to Schedule 1, line 12. A performing artist must meet all four tests: services as an employee in the performing arts for at least two employers, at least $200 from each of two employers, related performing-arts expenses above 10% of gross income from those services, and adjusted gross income of $16,000 or less before the expenses. For married taxpayers the first three tests are applied separately to each spouse, while the AGI test uses combined AGI. Missing one test means no adjustment.

What about everyone else

An employee outside these groups has no deduction for unreimbursed travel in the publication’s framework. The better path is usually to ask the employer for an accountable plan, because reimbursements paid under one are not wages. Our page on whether accountable plan reimbursements are taxable explains the three rules. The publication also notes that an employee who does not need to use it at all is one who fully accounted to the employer, was fully reimbursed, returned any excess and has no amount under code L in box 12 of Form W-2.

Self-employed workers keep the deduction

The suspension affects employees. If you are a sole proprietor, the publication says to report on Schedule C and not file Form 2106: travel other than meals on line 24a, deductible meals on line 24b, gifts and non-car transportation on line 27b, and car expenses on line 9. A person who is both an employee and self-employed must keep separate records for each activity. This is the reason that the same hotel night can be deductible for a freelancer and not for a W-2 colleague with identical travel.

Worked example

An Army reservist lives in Denver and drives to a drill 340 miles away. Unreimbursed lodging, meals and car costs come to $620, and the federal per diem and mileage amount for the trip works out to $540. Because the trip is more than 100 miles from home, $540 (the smaller number) is the adjustment on Schedule 1, line 12. The $80 above the federal rate is not deductible as an adjustment. Another employee of the same company who drove 60 miles for a work event and received no reimbursement has nothing to claim, unless he or she falls under another exception. These figures are our illustration of the publication’s method.

Sources

• IRS Publication 463, Travel, Gift, and Car Expenses (2025): Chapter 4, Car Expenses; chapter 6, Where To Report and Special Rules (Armed Forces Reservists, Officials Paid on a Fee Basis, Expenses of Certain Performing Artists, Impairment-Related Work Expenses); Introduction, Who doesn’t need to use this publication. Read November 2, 2026.

Edition read: Publication 463 (2025), for use in preparing 2025 returns. Rates and dollar limits on this page are the 2025 figures printed in that edition; check the current publication, form instructions and GSA.gov per diem tables for your tax year. This page summarizes the publication and does not replace it.