Mileage Reimbursement Requirements for Businesses in the State of Illinois (IL)

There are no Illinois laws governing how much or even whether an employer must pay any mileage rate for business travel. Most employers do pay travel expenses, including reimbursement for miles driven. The rate may be higher or lower than that of which the Federal government sets forth or which the state grants its employees and persons traveling on official state business.

The mileage reimbursement rate for the use of a personal vehicle while traveling on State of Illinois business is in accordance with the federal government rate. The federal government rate is the rate used by the IRS.

The mileage reimbursement rate is established each year on July 1. The new rate is set to match that of the federal government. As of July 1, 2006 the rate was increased to $.445 per mile from $.405. Interestingly, if the rate increases during the fiscal year the rate will not be changed until the following July, however if the rate should decrease it will be changed immediately.

The guidelines apply to state employees, including public institutions of higher learning, except community colleges. The Illinois Board of Education was included in February 2004. They will be reimbursed per mile for the use of personal vehicles while on state business.

When traveling on official state business, the guidelines set forth in the Governors Travel Control Board travel guide for State Employees. I have included here a summary of the basic council rules for business related travel.

All travel shall be by the most economical mode of transportation available considering travel time, costs, and work requirements. Modes of transportation include the usual means, such as trains, buses, taxicabs, airplanes, automobiles. Travel arrangements made by plane, boat or train must be the least costly reasonable alternative. All travel must be by the most direct route. When calculating mileage, distances between destinations are as shown on the Illinois Highway Map published by the Secretary of State.

Employers are required to reimburse injured employees for medical related travel expenses according to the Workers Compensation Commission. The commission does not follow the current IRS guidelines; instead the Governors Travel Control Board sets the mileage rates for state offices.

4 thoughts on “Mileage Reimbursement Requirements for Businesses in the State of Illinois (IL)

  1. My company is based out of Dallas TX. We are only getting rembursed 32 cents a mile and that only after 40 miles after every thing I’m reading can they do that? Please help. Thank you Teresa DeVoss.

  2. Hi Teresa! Yes, they can do that. Sorry that we were not as clear in this article as we could have been — it was posted a long time ago, by a staff member who is no longer with us. There is no law in Texas that an employer MUST reimburse an employee for mileage. A few states — including California — have laws that an employee must be reimbursed for all expenses related to working. Texas does not. It is entirely up to the employer, whether they pay anything for mileage or not. If the employer does pay mileage, the employer determines the rate. The IRS has established a standard rate for mileage, which many employers use for reimbursement — but there is no law that they have to.
    In 2004, the IRS rate for mileage reimbursement was 32.5 cents per mile. In the last half of 2008, when gas was $4.00 per gallon, it was 58.5 cents per gallon. Currently the IRS rate is 55 cents per mile for business.
    You can take a tax deduction for any business driving that the employer does not reimburse you for, as long as you keep a written record of business miles driven. An example: in your case, you could deduct 55 cents per mile for the first 40 miles, Then you could take a deduction of 23 cents per mile (the difference between 55 cents and 32 cents per mile) for the additional miles that you drive, if you itemize your income taxes. (Software like TurboTax makes this especially easy.)
    Of course, we realize this is not as much help as you would like, since you willl have to wait until you file taxes in Jan 2010 or later for the refund. HTH, and thanks for reading the blogs!~ Amelia

  3. Has the situation in Illinois changed since this 2006 posting? Does Illinois now require employees to be reimbursed for mileage, etc.?

  4. Hi Bob! No, there is no Illinois law that requires the employer to reimburse employees for mileage, or that dictates the rate if the employer chooses to do so. HTH, and thanks for reading the blogs!~Amelia

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