May 5, 2011

Changes to mileage reimbursement rate took effect May 1

by Anne Krapfl

The "default" mileage reimbursement rate -- which covers use of a personal vehicle for work-related trips of at least 100 miles when a university fleet vehicle is available -- was raised from 19 cents per mile to 25.5 cents per mile, effective May 1. The state Board of Regents approved the change at its meeting last week. The new rate still is 3 cents per mile less than the reimbursement rate prior to Jan. 1.

The new default rate is equal to 50 percent of the business reimbursement rate allowed by the federal Internal Revenue Service (IRS) -- currently 51 cents per mile.

Since 2005, Iowa State's reimbursement rates had been tied to the federal General Services Administration (GSA). In January, the GSA rate dropped to 19 cents per mile from 28.5 cents per mile.

The low GSA rate reflected only operation expenses, not considerations such as insurance or depreciation. This was considered inadequate for many university employees who must use their own vehicles for university business. A regent university task force studied the issue and proposed the solution the board approved, which ties reimbursement rates to IRS standards instead.

Out-of-state airport commute could qualify

When the combined cost of airfare and mileage is less than mileage and airfare out of the Des Moines airport, the full IRS mileage reimbursement rate (51 cents/mile) now is allowed on travel to these international airports: Kansas City, Minneapolis-St. Paul and Omaha.

The other instances in which the full reimbursement rate applies remain unchanged. These are:

  • The round trip is less than 100 miles
  • The round trip is 100 miles or more, but the employee is unable to reserve a vehicle from ISU transportation services
  • The employee is based off-campus permanently
  • The traveler is neither an ISU student nor employee

Questions about the change may be directed to Bill Cahill, 4-5124, or Erin Johnson, 4-5180, in the accounting office. Employees who have submitted mileage reimbursement claims for travel on or after May 1 using the 19-cents rate may submit claims for the difference.