Posted: 2/23/2026 12:30:47 PM EDT
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I am a W2 employee of a local government entity (public school district/ municipal BOE). During CY2025, I received a little over $600 in mileage reimbursements. The mileage reimbursements were based on submission of travel dates, and start/end points on an employer prescribed form to my supervising department (within the District) which in turn submitted a purchase order to Finance which paid them out, I believe at or below IRS rate. I have most of the invoices that came with the checks- some directly included the words mileage reimbursement in the description field, some were left blank. The mileage sheets .XLS submissions (and related correspondence) still exist in my work email and would substantiate the basis for the payments. I recently received a 1099NEC (non-empoloyee compensation) document for the reimbursements. I was thinking about reaching out to the Finance folks to attempt to get the 1099NEC corrected- since my understanding that is not something that should be issued to a W2 employee, especially for non-taxable reimbursements. If I am able to get that fixed- great! If I am not able to get the 1099 situation resolved, is there any way to appropriately report the 1099NEC amount in a way that won't be taxed so that the IRS doesn't think that I am either attempting to conceal income or adjust my tax return to treat it like income? [I am typically somebody who uses the standard deduction and do not derive any income from self-employment or contracting- only W2 work and things like interest/dividends/investment account distributions. |
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I would talk to your finance department and get this 1099 cancelled/corrected. Since you are a W2 employee, you are not supposed to get these. If that fails, I think you will have to file a schedule C for business income. You would show the income from the 1099, and report the miles driven as an expense. It should wash out to zero if they paid you the standard IRS deduction to pay you. |