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Vehicle allowances—Are vehicle allowances earnable compensation?
(1) If your employer provides you any payment or allowance in lieu of a reimbursement for expenses you incur or expect to incur in performing services for your employer, the payment or allowance is not compensation earnable. Your vehicle allowance does not qualify as compensation earnable if you receive the allowance in lieu of reimbursement for expenses that you incur or expect to incur in using your own vehicle for business purposes.
(2) The department presumes that any vehicle allowance provided to you by your employer is a payment in lieu of reimbursement for expenses and is not compensation earnable. If the contract authorizing your vehicle allowance states that it is provided solely in lieu of reimbursement for expenses that you incur or expect to incur in using your own vehicle for business purposes, the department's presumption is not rebuttable.
(3) Your vehicle allowance may qualify as compensation earnable to the extent that it exceeds your actual expenses. If your employer documents that your vehicle allowance exceeds the actual expenses you incur in driving your own vehicle for business purposes, the excess amount is compensation earnable. Your employer must maintain monthly contemporaneous records documenting the following:
(a) The dates, if any, on which you used a privately owned vehicle in performing services for your employer;
(b) The miles you drove the vehicle on each of these trips; and
(c) Your itinerary for each of these trips.
(4) How to determine what amount of your vehicle allowance, if any, is reportable as compensation earnable. If your employer documents that your vehicle allowance exceeds the actual expenses you incur in using your own vehicle for business purposes, your employer must report to the department as compensation earnable:
Your Vehicle Allowance LESS (Miles x IRS Rate)
(a) "Miles" above means the number of miles you drove a privately owned vehicle for business purposes during the month.
(b) "IRS rate" above means the Internal Revenue Service mileage rate for use by taxpayers computing the value of the use of a vehicle.
(5) Your vehicle allowance qualifies as compensation earnable if you also receive a separate reimbursement for each occasion you use your own vehicle for business purposes. If, in addition to your vehicle allowance, you receive a separate reimbursement for vehicle expenses for each occasion that you use a privately owned vehicle for business purposes, your vehicle allowance is compensation earnable.
(6) Any part of your vehicle allowance that qualifies as earnable compensation is excess compensation.
If any part of your vehicle allowance is included in the calculation of your retirement allowance, your employer will be billed for excess compensation under RCW 41.50.150
. Your employer's bill will equal the total estimated cost of the portion of your retirement allowance payment attributable to your vehicle allowance.
[Statutory Authority: RCW 41.50.050
. WSR 99-14-008, § 415-108-485, filed 6/24/99, effective 7/25/99; WSR 95-22-006, § 415-108-485, filed 10/18/95, effective 11/18/95.]