Fully Remote Employee Travel / Commuting Tax Considerations

All facts and circumstances need to be considered to determine proper tax treatment. For tax purposes:

• The IRS does not define headquarters. The IRS defines tax home as the general area or vicinity in which an individual’s regular place of business, employment, or post of duty is centered (otherwise known as the principal business or employment location), regardless of where the personal residence is maintained.
• Commuting is defined as travel from the employee’s home to one or more places of business. The IRS does not place a mileage limitation for commuting purposes. Reimbursements for commuting are taxable. In accordance with system policy, commuting is not reimbursable.
• The location of an employee’s principal place of business is determined by:
  • The relative importance of the activities performed at each place where employees conduct business and
  • The amount of time spent at each place where business is conducted.
  In addition, certain IRS rules must be met for an employee’s home office to be considered their principal place of business. The space must be used exclusively on a regular basis as the employee’s principal place of business. Also, it must be at the convenience of the employer. As each situation is unique and all facts and circumstances are applicable, the majority of the time spent and the importance of the duties performed at each location must be considered to determine the employee’s principal place of business.
• The employee’s principal place of business is an employee’s home if it is provided for the convenience of the employer. Generally, if an employee requests to work remotely as opposed to being required by the employer, it does not satisfy the convenience of the employer rules; therefore, travel to and from the employee’s home and the university is commuting and not reimbursable. The convenience of the employer requirement is not met if the employer provides designated workspace accessible to the employee at all times.

First Published: May 2024 | Last Updated: May 2024 | Last Reviewed: May 2024