A TAAP (Tax-Advantaged Automobile Program) is a vehicle reimbursement program designed to compensate employees for business-related driving and other approved work-related vehicle expenses incurred while using their personal vehicles.
Unlike FAVR programs, TAAP reimbursement rates are not based on an employee's location or a program's base vehicle. Instead, employers can choose from several reimbursement methods, including:
- The IRS Standard Mileage Rate
- A custom mileage rate set by the company
- A combination of fixed and variable reimbursement rates
Fixed and Variable Rates
TAAP programs always include a fixed rate, which is a set reimbursement amount intended to help cover vehicle ownership costs.
Some TAAP programs also include a variable rate, which reimburses employees based on their business mileage. Variable rates are optional and are determined by the employer's program design.
Submitting Reports
Employees should submit all work-related expenses, including mileage logs, according to their company's reimbursement schedule. Timely submissions help ensure reimbursements are processed accurately and on time.
Taxable Income Considerations
When a company's reimbursement rate exceeds the current IRS Standard Mileage Rate, the amount above the IRS rate may be considered taxable income.
Everlance automatically calculates any excess reimbursement amount and identifies the portion that may be subject to taxation, helping employers maintain compliance, keep employees informed, and support accurate tax reporting.
Tax Reporting
When available, employers can download their Tax Report by following the steps outlined in How to Download a Tax Report from the Team Dashboard.
If you need help deciding which tax year setting is right for your organization, check out our article, Deciding Which Tax Year Setting Is Best for Your Team.
Getting Started
To get started with a TAAP program, please contact support at support@everlance.com.
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