- Independent contractor mileage reimbursement driver#
- Independent contractor mileage reimbursement full#
- Independent contractor mileage reimbursement plus#
You just get paid according to the pay model. If you made more than that minimum, nothing happens. Prop 22 doesn't define a reimbursement, it defines a formula for calculating the minimum pay, all of which is taxable. That determines the minimum you should be paid. They multiply 120% of minimum wage times the active time. Those pay models remain in play.Īt the end of the week they add up your total hours of active time on the apps, and how many miles you drove while on deliveries (or rides if doing rideshare). All of these apps have different pay models.
Here's how it works: You go about your deliveries. In other words, your MINIMUM earnings are determined by those things.
Independent contractor mileage reimbursement plus#
What you are paid is not an hourly amount plus reimbursement if you are an app based worker in California. Here are the key words: Earnings and Compensation. Section 7453 Earnings Guarantee in California Proposition 22
Independent contractor mileage reimbursement driver#
Here's how the compensation section in Prop 22 begins:Ī network company shall ensure that for each earnings period, an app based driver is compensated at not less than the net earnings floor as set forth in this section. The way the 30¢ per mile is handled under Prop 22 helps determine if this is taxable. You are the only one claiming the particular expense so there's not the double dipping issue like when it's a reimbursement. If the money that you receive is taxable income, that money is not a reimbursement. You can't claim a reimbursed expense because that would mean that both you and the one that reimbursed you are claiming the same expense. You're being given the money to cover the expenses and that money is not included in your 1099 (as a contractor) or taxable income (as an employee).
If both of you claimed the same expenses, that's a problem with the IRS.Ī reimbursement is not taxable money. They get to claim the expense on their taxes. Basically it's like the contracting company or employer is paying directly for the expense. If it's a reimbursement, you are given money to cover the cost. It depends on who gets to claim that expense and whether you have to pay taxes on the payment. How it is handled determines whether those funds are considered a reimbursement or a payment. If you have certain expenses as an employee or as a contractor, you may be given funds to cover that expense. Distance is being used to calculate minimum pay Defining a reimbursement You are not being reimbursed for expenses under Prop 22. They are wrong in that the 30 cents per mile is NOT a reimbursement. They are right in understanding that if you are reimbursed for an expense, you can't still claim that expense on your taxes as an independent contractor. Some people have the mistaken idea that since Prop 22 requires that your minimum pay be based on factors including $0.30 per mile driven, that constitutes a reimbursement, which means you cannot claim those miles on your taxes. Understanding reimbursements and claiming expenses on taxes.
Independent contractor mileage reimbursement full#
That means you can claim your expenses in full on your Schedule C. If your payment is reported as taxable income, it is not a reimbursement. Here's a simple rule for you: If your payment is reported as taxable income, it is not a reimbursement. That's because the pay you receive is taxable pay, not a reimbursement. You can claim 100% of your mileage allowance (or vehicle expense) as a gig economy contractor in California under Prop 22, even with the 30 cent per mile pay calculation. Can you still claim miles on your taxes if you're getting paid 30 cents per mile in California? It is not a reimbursement for using your car. How does that impact the ability to claim miles on your taxes? Under Prop 22, the 30 cent per mile basis is part of your overall pay calculation. Prop 22 is going into effect and with it is a pay model that includes 30 cents per mile.
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