463: Tax Assessment & Calculation

Understanding Taxable Calculations for Drivers on a 463 Program

In the context of Cardata’s 463 reimbursement program, drivers receive mileage reimbursement for their business use of vehicles. However, if a driver's total reimbursement exceeds the IRS standard mileage rate, the overage is considered taxable income.

How It Works:

The IRS sets a standard mileage rate, which represents the maximum amount a driver can be reimbursed without incurring taxable income. In 2025, this rate is 70 cents per mile. Drivers under the 463 program will have their mileage and total reimbursement compared to this rate.

• Non-Taxable Limit: The driver’s business mileage is multiplied by the IRS rate ($0.70 per mile in 2025). This figure represents the maximum reimbursement that can be provided without generating taxable income.
• Taxable Income Calculation: If the driver’s total reimbursement exceeds the IRS Non-Taxable Limit, the difference between the two amounts is considered taxable income.

The example below shows a taxable income calculation for 2 drivers: Total Reimbursement - (Mileage * IRS Rate) = Taxable Income.