Can An Employee Deduct Travel Expenses for Work? + FAQs

Due to recent tax law changes, most W-2 workers can’t deduct a dime of these costs on their federal taxes – and those who try risk IRS penalties. For the vast majority of employees, no:

The Tax Cuts and Jobs Act (TCJA) of 2017 suspended all unreimbursed job expense deductions (including travel) from 2018 through 2025. That means a typical W-2 employee cannot write off unreimbursed flights, hotels, or mileage for work trips on their federal return. However, there are key exceptions: a few special categories of workers still can claim travel costs (with strict rules), and self-employed 1099 contractors can fully deduct business travel. Below, we unpack exactly when an employee can deduct travel expenses, what to avoid, and how to make the most of any available tax breaks.

• 💡 Why most employees can’t deduct work travel on federal taxes anymore – and the critical tax reform that changed everything in 2018
• 🔍 W-2 vs 1099: How deduction rules differ for traditional employees versus freelancers/contractors when it comes to writing off travel
• 🎯 Hidden exceptions: Which special professions (like reservists & performing artists) can still claim unreimbursed travel costs – and the hoops they must jump through
• 🌎 State-by-state twists: A breakdown of U.S. states that still allow employee travel expense deductions on state returns, even though federal law doesn’t
• ⚠️ Avoid costly mistakes: Common pitfalls – from trying to deduct your daily commute to poor record-keeping – that can trigger audits or lost tax savings

Can You Deduct Work Travel Expenses? The Surprising Answer

For most people on a company payroll, the answer is no – at least not on your federal tax return. Under current U.S. law, W-2 employees may not deduct unreimbursed travel expenses (or any unreimbursed job expenses) on their federal taxes through 2025. This federal ban was introduced by the Tax Cuts and Jobs Act of 2017, which temporarily eliminated miscellaneous itemized deductions for employees. In plain terms: if you spend your own money on a work trip that your employer doesn’t reimburse, you generally cannot subtract those costs from your taxable income (and attempting to do so could get the deduction disallowed or even draw penalties).

Why the ban? Before 2018, employees could write off unreimbursed “ordinary and necessary” job expenses (like travel) as an itemized deduction, subject to a 2% of AGI threshold. But after the 2017 tax reform, Congress suspended these write-offs for tax years 2018 through 2025 to simplify the tax code. As a result, millions of workers who previously deducted expenses for conferences, client meetings, or other work trips suddenly lost that tax break. In fact, the number of Americans itemizing deductions plummeted – dropping from 31% of taxpayers in 2017 to just 9% in 2020 – largely because deductions like unreimbursed travel expenses were no longer available for most.

The rare cases: Not all employees were left high and dry. There are specific categories of W-2 employees who can still deduct work travel costs under current law. These are defined by the IRS and include:

• Armed Forces reservists traveling over 100 miles for reserve duties
• Qualified performing artists (e.g. theatre, TV performers meeting IRS income criteria)
• Fee-basis government officials (state or local government paid on fees)
• Employees with disabilities who have impairment-related work expenses

If you fall into one of these groups, you can claim eligible travel expenses that your job didn’t reimburse – using Form 2106 and special rules (explained later). For example, a military reservist driving to a training site over 100 miles away and staying overnight can deduct mileage, lodging and meals (limited to federal per diem rates) for that trip. These deductions are taken “above the line” (directly reducing your gross income) so even if you don’t itemize, you get the benefit.

Self-employed workers (independent contractors, freelancers, gig workers) are a different story. If you’re not an employee but run your own business or work as a 1099 contractor, travel expenses for work are fully deductible as a business expense. In this case, your flights, hotel, rental car, etc. for a business trip are written off on Schedule C (or Schedule F for farm businesses) just like any other business cost. Essentially, the tax law still favors entrepreneurs here – allowing them to subtract necessary travel costs from business income – whereas it denies the deduction to regular employees.

Looking ahead: Barring new legislation, the current restrictions on employee travel deductions will expire after 2025. Starting with the 2026 tax year, unreimbursed job expenses (including travel) are scheduled to become deductible again for all employees – albeit as miscellaneous itemized deductions subject to the 2% of AGI floor. Congress could extend the ban or alter the rules before then, so stay tuned. But for now and the next couple of years, remember: if you’re a W-2 employee, Uncle Sam generally won’t subsidize your unreimbursed travel costs.

🚫 What to Avoid: Common Travel Expense Deduction Mistakes

When navigating work travel and taxes, it’s easy to slip up. Here are critical pitfalls to avoid so you don’t run afoul of IRS rules or miss out on savings:

• Trying to deduct daily commuting or routine travel: Regular commuting costs are never tax-deductible. Driving from home to your normal office (and back) is considered personal commuting, not a business travel expense. Don’t attempt to write off gas, mileage, or train tickets for your everyday commute – the IRS will flat-out deny it. Only travel away from your tax home (generally, overnight business trips outside your metro area) counts as potentially deductible work travel.

• Mixing personal trips with business deductions: If you tack on vacation days to a work trip or bring family along, be careful. You can only deduct the portion of expenses that is work-related. For instance, if you fly to a 3-day conference and then vacation 2 extra days, you may deduct the airfare (since the flight was primarily for business) and the 3 days of hotel for the conference – not the 2 personal days. Claiming personal travel or leisure activities as a business expense is a big no-no. Keep scrupulous records to separate business vs. personal costs on combined trips.

• Claiming expenses that were reimbursed: You cannot deduct any expense that your employer reimbursed you for. If your company paid for your plane ticket or gave you a travel stipend that covered your hotel, you don’t get to also take a tax deduction. (In fact, if the reimbursement was under an “accountable plan” – with receipts turned in – it isn’t even counted as your income, which is good.) Double-dipping by deducting reimbursed costs will be disallowed. Even choosing not to seek a reimbursement you’re entitled to won’t make it deductible – the IRS expects you to use your employer’s reimbursement policy. Bottom line: only out-of-pocket unreimbursed expenses have any chance of a write-off, and then only in permitted scenarios.

• Forgetting documentation and receipts: If you are eligible to deduct travel (e.g. self-employed or a reservist), you must keep detailed records. Save all receipts for airfare, hotels, rental cars, parking, etc., or use accurate logs for mileage. The IRS can deny deductions if you lack proof. Note key details like dates, destination, business purpose of the trip, and who you met (for example, note “Client meeting in Chicago on 03/10, airfare $350, lodging $180”). Good record-keeping is essential to substantiate your claim in case of an audit.

• Ignoring state tax opportunities: Many people don’t realize that some states still allow unreimbursed employee travel deductions even though federal law doesn’t. If you live in a state that decoupled from the federal rule, you might be leaving money on the table by not claiming eligible expenses on your state income tax return. (We’ll cover which states and how it works in the State-by-State section.) Don’t assume what’s non-deductible federally is also non-deductible for state – check your state’s tax rules so you don’t miss a possible deduction.

By steering clear of these mistakes – and understanding the current limits – you can avoid unpleasant surprises like a denied deduction or, worse, an IRS audit trigger.

🎓 Detailed Examples: How Travel Deductions Work in Real Life

Sometimes the easiest way to grasp these rules is to see them in action. Let’s walk through a few real-world scenarios illustrating who can (and can’t) deduct work travel expenses:

Example 1: Alice the Sales Rep (W-2 Employee, Unreimbursed Trip) – Alice is a salaried sales representative for a company (a regular W-2 employee). She pays out-of-pocket to attend a 3-day trade show in another state for her job – covering $1,200 in airfare and hotel, which her employer does not reimburse. Can Alice deduct these travel costs on her taxes?

Unfortunately, no. Because Alice is a W-2 employee and it’s 2025, unreimbursed business travel isn’t deductible for her on her federal return. It doesn’t matter that the expenses were ordinary and necessary for work – the tax law change bars her from claiming them. Unless Alice’s state allows a deduction (e.g. California or New York – see table below), she’ll have to eat the cost or persuade her employer to cover it next time. Tip: If Alice knows she can’t deduct such trips, she should consider negotiating an expense reimbursement arrangement with her employer or using pre-tax arrangements if possible, rather than bearing costs personally.

Example 2: Bob the Consultant (1099 Contractor/Freelancer) – Bob is an independent IT consultant who operates as a sole proprietor (files Schedule C). He travels from client to client and sometimes out of state for project work. In 2025, Bob spends $3,000 on flights, hotels, and Ubers for various client engagements. Can he deduct these costs?

Yes, absolutely. As a self-employed individual, Bob can write off 100% of his business travel expenses on Schedule C as part of his business deductions. There’s no 2% AGI hurdle or suspension for him – the TCJA changes did not affect self-employed expense deductions. Bob will subtract that $3,000 from his business income, directly reducing his taxable profit. Of course, he must keep receipts and only deduct legitimate business travel (if he took a personal detour, those costs must be excluded). But in general, contractors and freelancers like Bob still enjoy full travel expense deductions – a key tax advantage of self-employment.

Example 3: Carla the Reservist (W-2 with Special Exception) – Carla works a 9-to-5 job but also serves in the Army Reserve on weekends. She lives in Phoenix and has to travel to a base 150 miles away for a week-long training exercise, at her own expense. She spends $100 on gas and $500 on lodging and meals during the training. Normally, as a W-2 employee, unreimbursed travel isn’t deductible – but Carla qualifies as an Armed Forces reservist traveling >100 miles from home. The tax code makes an exception for her. Carla can deduct those unreimbursed travel costs on her federal return above the line (on Schedule 1) by filing Form 2106.

There are limits – e.g. her meals are subject to the standard federal per diem rate and only 50% deductible – but she will get to reduce her taxable income by these amounts. Essentially, Carla is using one of the “hidden” deductions that still exist for certain employees. Note: She must attach Form 2106 and maintain records (mileage logs, receipts) to substantiate the deduction. Other special-case employees (performing artists, fee-basis officials) would follow a similar process for their allowed expenses.

Example 4: Dan the Engineer (W-2 Employee, Reimbursed Travel) – Dan’s employer requires him to travel frequently but uses an accountable reimbursement plan. Dan pays for flights and hotels on his personal card but submits expense reports and the company pays him back in full. In 2025, Dan received $10,000 in travel reimbursements from his employer. How does this affect Dan’s taxes?

He cannot deduct anything – but he doesn’t need to. Because the company reimbursed all his costs under an accountable plan (meaning Dan provided receipts and only business-related expenses were paid), that $10,000 is not included in Dan’s W-2 income and he gets fully made whole tax-free. Dan doesn’t get a tax deduction for the travel (nor could he under current law), but effectively the employer’s reimbursements gave him the benefit already.

Important: If an employer reimburses your expenses properly, you don’t lose any money to deduct in the first place. However, if Dan’s company had reimbursed him as a taxable benefit (non-accountable plan), then the $10,000 would be added to his wages and Dan still couldn’t deduct the expenses – a worst-case scenario he’d want to avoid. This illustrates why employees should push for accountable plans so they aren’t stuck with unreimbursed, non-deductible costs.

Through these examples, you can see how different situations play out: A regular employee like Alice generally can’t deduct unreimbursed travel; a self-employed person like Bob can; a special-case reservist like Carla can, with conditions; and an employee with reimbursements like Dan simply doesn’t need a deduction (as long as the reimbursements are handled correctly). Use these scenarios as a guide to where you fit and how to approach your work travel expenses.

📝 Evidence & Analysis: Why the Tax Law Changed (and What It Means)

The prohibition on employee travel deductions wasn’t arbitrary – it was part of a broader tax overhaul aimed at simplifying deductions. Let’s dive into some evidence and context behind the rules:

• Tax Code Overhaul (2018): The TCJA of 2017 radically changed individual deductions. It eliminated unreimbursed employee expense deductions (among others) from 2018 through 2025. The idea was that doubling the standard deduction and simplifying the tax code would offset the loss of these miscellaneous itemized deductions. Indeed, millions fewer people itemize now – a Tax Policy Center analysis showed itemizers dropped from 31% to 9% of filers after the law.

• For employees, though, this meant losing a valuable perk. In 2017 alone, Americans claimed around $22 billion in unreimbursed employee expenses on Schedule A (which would have included travel, union dues, tools, etc.). After 2018, that figure went to virtually $0 for most, shifting the cost of work expenses entirely onto employees or their employers.
• Congress’s Rationale: Lawmakers reasoned that many small unreimbursed expenses (like a few hundred in mileage or supplies) weren’t worth the complexity on tax returns. By nixing them (at least temporarily), taxes became simpler for many – but some workers with large out-of-pocket costs felt the pinch.
  • The TCJA changes are set to expire after 2025, presumably restoring the old deduction rules unless extended. There’s ongoing debate on Capitol Hill: should employee deductions come back (helpful to workers but complicating taxes), or should the ban continue (simpler filing, but potentially unfair to those who spend a lot for their jobs)? As a taxpayer, keep an eye on these developments as 2025 approaches.
• Special Exceptions Still in Place: The existence of carve-outs for reservists, performers, etc., is essentially Congress acknowledging that certain employees have atypically high, necessary expenses that employers often don’t cover. For example, a National Guard member might travel long distances to drills without reimbursement; without a deduction, they’d be penalized for serving.
  • Thus, the law preserved deductions for a few categories of employees. These exceptions were codified in the tax law (e.g., reservist travel is deductible if more than 100 miles from home). The IRS provides guidance in Pub. 463 and Form 2106 instructions on how those individuals claim the expenses. While these groups are small in number, the tax savings for them can be significant – effectively softening the blow of the TCJA’s broad disallowance.
• Employee Behavior and Impact: With no federal deduction available, one might expect employees to press employers harder for reimbursements – and evidence suggests this is happening. A 2024 survey found that half of all staff globally who are entitled to expense reimbursements are not claiming them at all, leaving billions of dollars unclaimed. Some cite hassle or fear of annoying the boss with expenses. The result: many employees eat the costs and now have zero tax recourse. This highlights a key point – in the current landscape, if your employer doesn’t reimburse you, you’re generally stuck with the expense.
  • That financial pressure can affect job satisfaction. It’s no surprise that surveys also show 48% of employees say out-of-pocket work expenses cause them stress, and a third report that cumbersome reimbursement processes deter them from even filing claims. Tax-wise, the removal of the deduction put the onus on employers (in theory) to adopt better reimbursement policies. But not all have done so, meaning employees should be proactive: negotiate expense coverage, use company credit cards, or seek per diem allowances where possible, since you can’t fall back on a tax deduction.
• IRS Enforcement: Another piece of evidence comes from IRS audit focus. In the past, large unreimbursed expense claims (especially if they exceeded that 2% threshold by a lot) could trigger scrutiny – agents would ask if those expenses were truly unreimbursed and for proof.
  • Now, with the blanket ban, the IRS expects no such deductions on most returns. If a regular employee attempts to deduct travel by mistake (or intentionally hoping to slip it through), it’s likely to be flagged. Tax preparers note that returns claiming unreimbursed job expenses after 2018 for non-qualifying employees will almost certainly get corrected by the IRS or picked up in audit. The accuracy-related penalties (typically 20% of any underpaid tax) could apply if one egregiously or negligently over-claims deductions. In short, the IRS is well aware that, aside from the narrow exceptions, no one should be deducting these items – so don’t test them by trying to sneak travel costs onto your Schedule A. It’s not worth the risk.

The current tax landscape for employee travel deductions is the product of deliberate law changes aimed at simplification, with a few safety valves for special cases. The evidence shows it dramatically reduced itemized filings and shifted behavior around expense reimbursements. For now, employees must treat unreimbursed travel costs as a personal financial responsibility (or a matter to negotiate with their employer), not as a tax write-off – with only a sliver of exceptions. All signs indicate this will remain the case through 2025, so planning accordingly is crucial.

🔄 Comparisons: How Different Situations Stack Up

Tax rules can vary widely depending on your status and timing. Let’s compare key scenarios and eras to see how travel expense deductions differ:

W-2 Employee vs. 1099 Contractor (Worker Classification)

Perhaps the most important comparison is between being a traditional employee (W-2) and being an independent contractor (1099). This one factor basically determines whether you can deduct work travel today:

• Employees (W-2): Cannot deduct unreimbursed travel expenses on federal returns (2018-2025). Any travel costs not paid by the employer simply remain personal expenses. Even if you itemize, these expenses are off-limits federally. Only if you belong to a special subset (reservist, etc.) can you use Form 2106 to deduct certain travel. Moreover, employees rely on their employer’s reimbursement policies; tax relief is unavailable unless their state provides something. Summary: W-2 folks face a “no deduction” wall for unreimbursed travel currently.
• Independent Contractors/Freelancers (1099): Fully can deduct business-related travel expenses. If you’re self-employed, travel costs incurred to perform your work are business expenses that reduce your taxable profit. From airfare and lodging to 50% of meals, it’s all deductible as long as it’s ordinary, necessary, and work-related. There is no suspension on these deductions – they were untouched by the TCJA. In practice, a freelancer has much more freedom (and incentive) to claim travel costs. For instance, a graphic designer who travels to a client’s site or a realtor driving around for work can deduct those miles at the IRS standard mileage rate, whereas an employee doing the same cannot. Summary: 1099 workers enjoy a “full deduction” freedom for travel, akin to pre-2018 rules.

This stark difference means some people have actually re-evaluated their work arrangements. We’ve heard of creative strategies like employers converting certain staff to independent contractor status, or employees negotiating stipends, to effectively restore deductibility. Caution: one shouldn’t change status purely for a deduction – there are many legal and financial implications to being a contractor vs employee. But it underscores that tax code disparities can influence behavior. If you do have side gig income, note that you can at least deduct expenses against that self-employed income even if your main job’s expenses aren’t deductible.

Before 2018 vs. After 2018 (Tax Reform Impact)

Another useful comparison is historical – how things were prior to 2018 versus now:

• Before 2018: All W-2 employees could deduct unreimbursed travel expenses (and other unreimbursed job costs) as a miscellaneous itemized deduction on Schedule A. However, you could only deduct the portion exceeding 2% of your AGI. Example: If your AGI was $60,000, the first $1,200 of combined unreimbursed expenses weren’t deductible, but anything above that was. This rule meant the deduction mainly benefited those with substantial expenses.
  • Still, many employees who traveled a lot or had big out-of-pocket costs did itemize and deduct them. Back then, keeping receipts and filing Form 2106 was commonplace for traveling employees. The deduction, combined with others, could reduce taxable income significantly for road warriors, traveling nurses, salespeople, etc. In essence, before 2018, the tax code shared some of the travel burden with employees, albeit with limitations.
• 2018 through 2025: The landscape flipped. Unreimbursed employee expenses are completely nondeductible on federal returns (again, except special cases). That 2% threshold became irrelevant since none of it counts. Employees have been encouraged to take the standard deduction (which increased) since itemizing often yields no benefit without those miscellaneous deductions.
  • The only employees filing Form 2106 now are those few allowed groups. To illustrate: an engineer who spent $5,000 on unreimbursed travel in 2017 might have deducted, say, $3,800 of it after the 2% floor. In 2018, if the same happened, she got $0 deduction. Many in the tax community noted this as a significant tax increase for workers who personally fund a lot of job expenses (think travelling consultants or technicians). Thus, post-2018, employees need to either forgo those expenses, get their employer to pay, or simply accept that work-related travel might cost them more.
• After 2025 (Expected): If the law sunsets as written, 2026 will revert to pre-2018 rules. Employees would again be able to itemize unreimbursed travel costs subject to the 2% AGI rule. This wouldn’t be as generous as a dollar-for-dollar above-line deduction, but it’s something. It remains to be seen if Congress will extend the ban or make new rules.
  • Some proposals have suggested allowing a partial above-the-line deduction for certain job expenses or raising the 2% threshold. For planning, employees who anticipate significant expenses in 2026 and beyond should watch legislative updates. We might return to the old normal, or this temporary ban could become permanent. In any case, the difference between the pre-2018 era and now has been dramatic – and 2026 could swing the pendulum yet again.

Reimbursements vs. Deductions

It’s also instructive to compare the two ways work travel gets paid: employer reimbursement vs. tax deduction. If you’re an employee, you ideally want your job-related travel covered by the company. Here’s how the two differ:

• Employer Reimbursement: This is when your company pays you back (or provides an advance/per diem) for travel costs. Under a proper accountable plan, you turn in receipts or expense reports, and the company reimburses you tax-free. The expense never shows up on your W-2 income, and you don’t deduct anything on your return.
  • The benefit here is you’re made whole with pre-tax dollars – effectively a 100% recovery of what you spent. The employer gets to deduct the expenses on their business taxes, but you don’t report the reimbursement as income. This is the best-case scenario for an employee because you don’t incur a cost net of tax at all.

• Tax Deduction (when allowed): If you can’t get reimbursed, a tax deduction is the fallback. When it was available, a deduction reduced your taxable income by the expense amount (or a fraction of it in some cases), saving you tax proportional to your bracket. For instance, if you deducted $1,000 and you’re in the 22% federal tax bracket, that saves about $220 in tax. You still spent $1,000, but your tax bill is $220 lower, so your net cost is $780. That’s better than no help at all, but not as good as getting reimbursed the full $1,000. Moreover, deductions often have limits (the 2% floor, only 50% of meals, etc.). So while a deduction can cushion the blow of work expenses, it rarely covers them completely. With deductions largely gone for employees now, the comparison tilts even more: a reimbursement is effectively worth far more.

In practice: If you’re an employee facing significant travel expenses, it’s wise to pursue an employer reimbursement arrangement rather than hoping for tax relief. The tax deduction route is largely closed off currently, and even if it returns, it won’t recover the full cost. Many employers, especially post-pandemic, have become more conscious of remote and travel expenses. Some states (like California) even require employers to reimburse necessary business expenses incurred by employees. From a financial planning perspective, try to build expected travel costs into your employment negotiations – e.g., ensure the company provides a travel budget, corporate card, or per diem. That way, you’re not relying on the tax code to bail you out (especially since it won’t, at the moment).

To sum up, comparing scenarios underscores a key message: being a W-2 employee vs. being self-employed vs. being a special-case employee leads to very different outcomes for travel deductions. And between getting reimbursed or taking a deduction, reimbursement is king (and nowadays essentially the only game in town for employees). Knowing these contrasts can help you strategize: e.g., track self-employed mileage diligently for your side gig, push for that company reimbursement policy, or time certain expenses for potential law changes.

📚 Key Terms and Concepts for Travel Deductions

Understanding the lingo of business travel deductions will help clarify what is (and isn’t) allowed. Here are some key tax terms and concepts related to deducting travel expenses:

• Ordinary and Necessary Expense: This is the general standard for any business expense. Ordinary means common and accepted in your trade, and necessary means helpful and appropriate for your business. Travel costs must meet this test – flying to a client meeting is ordinary & necessary; flying first-class for personal luxury might not be considered necessary.

• Tax Home: Your “tax home” is essentially your main place of work or business, regardless of where you live. Generally, travel expenses are deductible only when you are away from your tax home on business. For example, if your tax home is New York City (where your office is) and you travel to Chicago for a conference, that’s away-from-home travel. But driving from your house in the suburbs to your office in the city is not – that’s commuting (not deductible). The concept of tax home prevents people from writing off everyday travel within their metropolitan area. It also ties into the one-year rule for temporary assignments.

• Temporary Assignment (One-Year Rule): Travel to a work location is considered “temporary” (and thus deductible for those who can take travel deductions) if you expect to be at that location for one year or less. If an assignment or project away from your main job extends beyond one year, the IRS considers your tax home to have shifted, and those travel expenses become non-deductible (they’re essentially deemed akin to moving your home). This rule matters for contractors or even employees on long assignments: under one year, your housing and meal costs could be deductible (or reimbursable tax-free) as travel; over one year, nope.

• Accountable Plan: As mentioned, an accountable plan is an employer’s reimbursement arrangement that meets IRS criteria: you must substantiate expenses with receipts or logs, and return any advances you didn’t use. If these rules are met, reimbursements are not taxed to the employee, and the employer deducts them. Non-accountable plans, by contrast, might give you a lump sum without receipts – those payments are treated as taxable income, and the employee cannot deduct the expenses (bad deal!). Accountable plans are the gold standard; as an employee, always prefer them for any expense reimbursements.

• Standard Mileage Rate vs. Actual Expenses: For business use of a personal vehicle, the IRS offers a choice. The standard mileage rate is a flat rate per mile (e.g., 65.5 cents per mile for 2023) that includes gas, wear-and-tear, maintenance, etc. If you drove 200 miles for work business, you could claim $131 (200 × $0.655) as a travel expense using the mileage rate. Alternatively, you could calculate your actual car expenses (gas, oil, depreciation, insurance attributable to business miles) and deduct that proportion. Most people use the standard mileage rate because it’s simpler. Self-employed folks can take this deduction; employees currently cannot, but if you’re a permitted category (say a reservist driving to drill), you’d use Form 2106 and can choose the standard rate or actual costs. Keep a mileage log regardless.

• Per Diem: “Per diem” (Latin for “per day”) is a daily allowance for travel expenses. Rather than tracking every receipt, employers can give employees a per diem amount for meals and lodging. The IRS sets per diem rates for different locations. If you spend less than the per diem, you typically don’t have to return the difference under some plans (and it’s still tax-free to you if within IRS rates). If you spend more, you eat the excess cost.
  • From a deduction perspective, if you’re claiming travel yourself, you can’t just use per diem rates unless you’re an employer or an eligible employee using them – self-employed people can opt to use federal per diem rates for meals (and lodging in some cases) instead of actual expenses. Note that meal per diems are still subject to the 50% limit in most cases when deducting. Per diems mainly simplify expense reporting. If your employer gives you a per diem that doesn’t exceed IRS rates, it’s treated like an accountable plan reimbursement – not taxable, and you don’t deduct anything.

• Miscellaneous Itemized Deduction & 2% AGI Rule: This refers to the tax category where unreimbursed employee expenses used to live (and may again after 2025). “Miscellaneous itemized deductions” include unreimbursed job expenses, tax prep fees, and other odds and ends. They could only be deducted if, in total, they exceeded 2% of your adjusted gross income (AGI).
  • For instance, with $50,000 AGI, the first $1,000 of such expenses did nothing; only the amount above $1,000 counted. This rule meant people with smaller expenses or lower income thresholds often got no benefit. Post-2018, this whole category was wiped out on federal returns. If it comes back, expect that 2% haircut to apply again (unless new law changes it).

• Above-the-Line vs. Below-the-Line: An “above-the-line” deduction is one that you can take from gross income to arrive at AGI (it’s on Schedule 1 of Form 1040, not on Schedule A). Above-line deductions are valuable because you get them whether or not you itemize, and they can affect other tax calculations. The special deductions for reservists, performing artists, and fee-basis officials are above-the-line, meaning those folks deduct their allowed expenses on Schedule 1.
  • “Below-the-line” usually refers to itemized deductions on Schedule A (which you only use if itemizing over the standard deduction). Unreimbursed employee travel, for most, would be a below-line itemized deduction if it were allowed. Above-line is generally better. For example, educator expenses (up to $300 for teachers’ classroom costs) are above-the-line, so even a teacher who takes the standard deduction still gets that break. Knowing which side of the line a deduction falls on tells you how universally accessible it is.

These key terms frame the discussion on travel deductions. By mastering them, you can better decode IRS rules and ensure any actions you take (like logging miles or saving receipts) are aligned with the deduction strategies available to you.

🌐 State-by-State: Where Can Employees Still Deduct Travel Expenses?

While the federal tax code has shut the door on unreimbursed travel deductions for employees, some states still allow them on state income tax returns. States often conform to federal tax laws, but a handful chose to decouple from the TCJA’s elimination of employee expense deductions. This means if you work in certain states, you may deduct unreimbursed job expenses (including travel) on your state return even though you can’t on your federal.

Below is a table of states that, as of 2025, permit a deduction for unreimbursed employee business expenses, and what that means for your travel costs:

State	State Tax Treatment of Unreimbursed Employee Travel Expenses
Alabama	Allows itemized deduction of unreimbursed employee business expenses (including travel) for any profession. You can itemize on Alabama taxes even if you took the standard deduction federally. All ordinary and necessary work travel costs are deductible on the AL state return.
Arkansas	Follows a similar approach to Alabama – unreimbursed employee expenses are deductible on the AR state return regardless of occupation. Arkansas provides a form AR2106 for employees to calculate these expenses. Travel costs can be claimed if you itemize for Arkansas.
California	Did not conform to the federal suspension. CA allows unreimbursed employee expenses as an itemized deduction on your state return. In practical terms, California taxpayers can still deduct unreimbursed travel, mileage, etc., subject to the 2% of AGI rule on CA Schedule CA. If you work in CA and had unreimbursed trip expenses, be sure to claim them on your state taxes.
Hawaii	Also decoupled from the TCJA change. Hawaii permits deduction of necessary unreimbursed employee expenses on the state return. So, an employee in Hawaii who paid for a work trip out-of-pocket can itemize those costs for Hawaii income tax purposes (again usually with a 2% threshold).
Maryland	Allows unreimbursed employee business expense deductions on the state return. Maryland taxpayers can itemize these expenses (even if not itemizing federally). This means if you have unreimbursed travel for work, you may claim it on Maryland Form 502SU. Maryland often provides a worksheet for such expenses.
Minnesota	Decoupled partially – Minnesota allows a subtraction for certain unreimbursed employee expenses. Taxpayers there can deduct unreimbursed work expenses (travel, tools, etc.) on their state return by completing Minnesota’s Schedule M1M. The state essentially “adds back” the deduction you lost at the federal level.
New York	New York State allows itemized deductions for unreimbursed employee expenses regardless of profession, similar to AL/AR. You can itemize on NY even if you took the federal standard deduction. NY provides an IT-196 form mirroring the old federal Schedule A. If you’re a NY employee with unreimbursed travel, you can deduct it on your NY return (subject to 2% AGI reduction).
Pennsylvania	Different system: PA doesn’t follow federal itemized deductions at all. Instead, Pennsylvania allows a direct deduction for unreimbursed employee business expenses on PA Schedule UE. This is an adjustment against your wage income on the PA return. It’s available to any employee with ordinary, necessary unreimbursed expenses, so travel costs for a PA employee can be deducted in full (no 2% floor in PA). PA is quite favorable: if you had $2,000 of unreimbursed travel, you fill out Schedule UE detailing it and subtract the $2,000 from your PA taxable income.

As shown, eight states (as of current rules) still have your back on unreimbursed travel expenses. If you work in one of these states, here are a few pointers:

• You often can itemize on your state return even if you didn’t on the federal. For example, in AL, AR, NY, etc., you could take the federal standard deduction (since you couldn’t use your expenses there) but still file a detailed itemized deduction schedule for state to claim those expenses.
• The 2% of AGI threshold typically still applies in states that mirror the old federal rules (like CA, NY). So high earners need fairly large expenses to see a benefit. Pennsylvania is an outlier with no threshold.
• Some states have special forms (PA Schedule UE, AR Form 2106, etc.), so make sure to fill those out if you’re taking the deduction. Tax software usually handles this if you indicate you have unreimbursed expenses.
• Locality matters: It’s your tax residency state and/or the state where you file that determines this. If you live in one of these states, you’re in luck. If you work in one but live elsewhere, state non-resident return rules might apply. Consult a state-specific guide or CPA if you’re crossing state lines.

Finally, note that other states not listed have conformed to the federal law – meaning in most states, you still cannot deduct unreimbursed travel on the state return either. Always double-check your own state’s revenue department guidance each tax year, as laws can change. But the table above represents the major holdouts where employees get a state-level break. It can make a real difference: for instance, a California employee with big unreimbursed travel expenses might see hundreds of dollars in state tax savings by itemizing on the CA return, even though they got nothing on the federal.

✅ Pros and Cons of Deducting Travel Expenses

Is claiming travel expenses on your taxes beneficial? It can be, but it comes with limitations. Here’s a quick pros and cons overview from the employee perspective:

Pros of Deducting Travel Expenses	Cons of Deducting Travel Expenses
Lowers taxable income when allowed, which can save you money by reducing the tax you owe (your work travel essentially gets partially subsidized by the tax break).	Most employees can’t use it at all under current federal law (2018–2025), so for W-2 workers the “travel deduction” is off the table, making this benefit moot unless laws change or you qualify as an exception.
Helps offset high out-of-pocket costs for self-employed folks and special-case employees. If you spend a lot on business travel, deductions ensure you don’t pay taxes on money you had to spend to earn your income.	Strict rules and record-keeping are required. To claim travel expenses, you need detailed documentation, and only “ordinary & necessary” expenses qualify. Mistakes or lack of proof can lead to denied deductions or even audits.
State tax savings: In certain states that allow it, employees can still get a deduction for travel costs, lowering state taxable income. This can provide some relief even when federal law doesn’t.	Partial benefit: Even when you can deduct, you usually don’t get a dollar-for-dollar return. For example, a $1,000 deduction might save a $200–$300 in tax depending on your bracket (and meal costs are only 50% deductible). A deduction is not a full reimbursement.
Encourages careful tracking of expenses – knowing you plan to deduct can motivate better budgeting and record-keeping for work travel, which can also help you manage and potentially get reimbursed by employers.	Subject to limitations: Historically, deductions fell under the 2% AGI rule (reducing their usefulness for many), and certain expenses like lavish or extended travel might be non-deductible. There’s also the risk of reliance – counting on a deduction that might sunset or be disallowed.
Above-the-line advantages (for some): If you qualify for an above-AGI deduction (e.g., reservist travel), it can reduce taxable income even if you don’t itemize, potentially lowering adjusted gross income which can benefit other tax calculations.	Complexity and changing laws: Tax rules for deductions can be complex and they change. Planning on a deduction that Congress might remove (or vice versa) adds uncertainty. Many prefer the simplicity of employer reimbursements over navigating tax forms and laws for a deduction.

In short, the pros of travel deductions are significant if you’re eligible – tax savings and cost relief – but the cons are that most employees simply don’t have access to this benefit right now. Even where available, deductions require diligence and only repay a fraction of what you spend. Whenever possible, it’s more advantageous for an employee to get costs covered upfront by the employer (essentially a 100% benefit) rather than relying on a tax deduction later (partial benefit). That said, for those who do qualify or when the rules allow, you absolutely should take advantage of travel expense deductions to avoid paying more tax than necessary.

🤝 Related Entities and Concepts in Work Travel Deductions

To fully understand the landscape of employee travel expenses and tax deductions, it helps to know the key players, laws, and terms that frequently come up. Here are some related entities and concepts and how they connect to this topic:

• Internal Revenue Service (IRS): The U.S. government agency responsible for tax collection and enforcement. The IRS issues regulations and publications (like IRS Publication 463: Travel, Gift, and Car Expenses) that explain what travel expenses are deductible and how to substantiate them. The IRS is also the entity that processes your tax return – if you claim a travel deduction as an employee now, it’s the IRS that will flag it because it knows the law disallows it (except for certain forms like Form 2106 scenarios). Essentially, the IRS sets the rules we’ve discussed and polices them through audits and guidance.

• Tax Cuts and Jobs Act of 2017 (TCJA): A landmark tax reform law that took effect in 2018, passed by Congress and signed by the President. This law is the reason employees can’t deduct unreimbursed expenses currently. The TCJA nearly doubled the standard deduction, lowered tax rates, and in exchange, eliminated or suspended many itemized deductions (including unreimbursed employee expenses). It’s a temporary change (2018–2025) unless extended. In our context, “TCJA” is essentially shorthand for the rules that removed employee travel deductions. Whenever we refer to the suspension of deductions, we’re talking about this law.

• Form W-2 and Form 1099: These are not deductions themselves but forms that represent how you’re classified. A W-2 is the form employees receive detailing their wages and taxes withheld – being a W-2 employee means your taxes are handled through payroll and you are subject to the no-deduction rules for unreimbursed expenses. A 1099-NEC (formerly 1099-MISC for nonemployees) is the form independent contractors receive for income. If you’re getting a 1099 for your work, you’re considered self-employed for that income, and you can deduct business expenses like travel. Thus, W-2 vs 1099 status is at the heart of who can deduct travel. These forms are “entities” in that they designate your tax role.

• IRS Form 2106 (Employee Business Expenses): This is the tax form used by qualifying employees to deduct unreimbursed job expenses. Prior to 2018, a lot of employees filed Form 2106 to claim travel, mileage, and other expenses and then carried those amounts to Schedule A. Post-TCJA, Form 2106 is now only used by the exception categories (reservists, artists, fee-basis officials, and impairment-related expenses). For example, Carla the Reservist from our example uses Form 2106 to calculate her deduction. The form feeds either into Schedule 1 (for above-line deductions) or Schedule A (for the impairment expenses). If you’re a regular employee, you likely won’t be touching Form 2106 until at least 2026. But it’s the key form for those who still can claim something. Knowing Form 2106 exists reminds us that some employees do have deductible expenses now – it’s just a limited group.

• Schedule A (Itemized Deductions): This is the schedule on the federal 1040 where itemized deductions are listed (things like mortgage interest, state taxes, charitables, etc.). Before 2018, unreimbursed work expenses were included here as a miscellaneous deduction. Currently, on 2018–2025 Schedule A, that line is gone. The concept of Schedule A is central to this topic because if the deduction returns in 2026, it will appear here again (with the 2% threshold). Schedule A vs standard deduction is a choice taxpayers make; TCJA made standard often better for many. From an entity perspective, Schedule A is where one would have deducted travel if allowed, and some states’ forms (like NY IT-196 or CA Schedule CA) mimic it to allow those deductions at the state level.

• State Tax Agencies/Departments of Revenue: Each state has its own tax authority (e.g., California Franchise Tax Board, New York Department of Taxation and Finance, etc.). These entities decide how much to conform to federal tax law. As we saw, some states chose to keep allowing employee expense deductions. For instance, the California Franchise Tax Board explicitly states that employees can still deduct unreimbursed job expenses on California returns.
  • State tax agencies also provide guidance (often on their websites or instructions) about how to claim these on state forms. For employees who live in states with deductions, the state tax department is where you might find a list of allowed expenses, any differences from federal definitions, and form instructions (like the Schedule UE in PA). So, state tax agencies are “related entities” in the sense that they govern the rules we outlined in the State-by-State section.

• U.S. Tax Court (and Case Law): While maybe beyond the scope of the average reader, it’s worth noting that disputes over deductions sometimes end up in the Tax Court. There have been numerous Tax Court cases over the years about whether certain travel was deductible. For example, cases determining what a taxpayer’s “tax home” is (to decide if their travel was away from home), or whether a temporary work location was truly temporary.
  • The Tax Court often sets precedents, such as the one-year rule for temporary assignments (which originally came from case law before being codified). If you ever have an edge-case scenario (say you try to deduct some travel and the IRS denies it), the Tax Court is the venue to appeal. Notable cases include Commissioner v. Flowers (1946) which established that commuting is personal (not deductible), and more recent cases dealing with itinerant workers. While most employees won’t directly tangle with the Tax Court, its existence and decisions underpin the rules we follow.
• Tax Professionals (CPAs, Enrolled Agents, Tax Attorneys): These individuals and organizations (like H&R Block, TurboTax (Intuit), and professional CPA societies) are involved as advisors and interpreters of tax law for the public. They create articles (many cited here) summarizing rules, and they help taxpayers prepare returns in compliance. If you’re unsure about a travel expense situation, a tax professional is a key resource.
  • They can clarify if you fall into an exception, whether your state allows something, or how to structure reimbursements. In the context of unreimbursed expenses, tax pros have been busy educating clients since 2018 that “No, you can’t deduct that anymore” – a message that sometimes comes as a surprise. Organizations like the AICPA have even lobbied Congress about restoring deductions for work expenses, arguing it’s a fairness issue for employees. So, while not a rule-making entity, the community of tax professionals is very much part of the landscape, ensuring people understand and correctly apply these travel deduction rules.

By familiarizing yourself with these entities and concepts – from the IRS and TCJA to forms like 2106 and the role of states – you gain a 360° view of the environment in which employee travel expense deductions exist (or don’t). It’s a mix of law, enforcement, paperwork, and advice. Knowing the players helps you navigate the system smarter: for example, recognizing “Ah, I can’t deduct this on federal (TCJA rule), but I’ll check my state DOR site to see if they allow it” or “This sounds like one of those cases in Tax Court about tax home – maybe I should get professional advice.” In essence, these entities set the stage and boundaries for what you can do when it comes to work travel and taxes.

❓ FAQs – Employee Travel Expenses and Deductions

Finally, let’s answer some frequently asked questions that employees, contractors, and managers often raise about deducting travel expenses. Each answer is brief and to the point, starting with a Yes or No:

Q: Can I deduct travel expenses if my employer doesn’t reimburse me?
A: No. If you’re a regular W-2 employee, unreimbursed work travel costs aren’t deductible on your federal return under current law (2018–2025). Only specific exception roles or certain state taxes allow it.

Q: I’m a W-2 employee who attended a work conference – can I write off my flight and hotel?
A: No. Not on your federal taxes. Conference travel you paid yourself isn’t federally deductible for employees right now. Try to get your employer to cover it or see if your state permits a deduction.

Q: As a freelancer (1099 contractor), can I deduct airfare, hotels, and meals for a business trip?
A: Yes. If you’re self-employed, all ordinary and necessary travel expenses for work are tax-deductible on your Schedule C. Just keep receipts and note the business purpose. (Meals are 50% deductible in most cases.)

Q: My company reimbursed my travel costs – can I also claim a deduction for them?
A: No. You can’t deduct expenses that were reimbursed. A proper reimbursement isn’t taxable to you, but it also means you have no unreimbursed expense to deduct. Deducting reimbursed costs would be double-dipping (not allowed).

Q: Do any states let me deduct unreimbursed employee travel expenses?
A: Yes. A handful of states (e.g. CA, NY, PA, AL and a few others) still allow it on their state income tax returns. You might be able to claim those expenses on your state taxes even though you can’t on federal.

Q: I’m an Army Reservist – can I deduct my travel to drills or training?
A: Yes. If you travel more than 100 miles from home for reserve duties, you can deduct unreimbursed travel expenses for those drills as an above-the-line deduction on your federal return. Use Form 2106 to calculate it.

Q: Will unreimbursed employee expense deductions come back after 2025?
A: Yes, unless new legislation extends the ban. The current law has these deductions returning in 2026 (with the old 2%-of-AGI limits) Congress could change this, so stay updated as 2025 ends.