Can Company Drivers Claim Per Diem on Taxes?

No. If you are a W-2 company driver, you cannot claim per diem on your taxes as a personal deduction on your federal return. Federal law permanently bars regular employees from deducting unreimbursed business expenses, including meals and incidentals on the road. The only way you receive tax-free per diem is through an employer-sponsored accountable plan that meets IRS requirements, and how your employer structures that payment decides whether the money reduces your taxable wages or shows up as ordinary income on your W-2.

Why the Personal Deduction Is Gone for Good

Before 2018, W-2 employees could deduct unreimbursed business expenses as miscellaneous itemized deductions on Schedule A, subject to a 2% floor based on adjusted gross income. The Tax Cuts and Jobs Act of 2017 suspended that entire category of deductions for tax years 2018 through 2025. Many drivers expected the write-off to return in 2026. It is not returning. The One Big Beautiful Bill Act, signed into law in 2025, permanently eliminated miscellaneous itemized deductions from the federal tax code.¹

The practical result: as a W-2 company driver, you cannot write off per diem, fuel costs, truck supplies, or any other unreimbursed work expense on your personal federal return. Form 2106 still exists, but only for a narrow list of workers (Armed Forces reservists, qualified performing artists, fee-basis state or local officials, and employees with impairment-related work expenses) and truck drivers are not on it.² Filing Form 2106 as a regular company driver is a common audit trigger.

A handful of states still allow unreimbursed employee business expense deductions on state income tax returns even though the federal deduction is gone. If you file in one of those states, check the state instructions, because thresholds and rules differ.

The Only Tax-Advantaged Path: Employer Accountable Plans

Since you cannot deduct per diem yourself, the tax benefit has to come through your employer. When a trucking company pays per diem under what the IRS calls an accountable plan, those payments stay out of your taxable wages entirely. They do not appear in Box 1 of your W-2, and neither you nor your employer owes income tax, Social Security tax, or Medicare tax on the amount.³

To qualify as an accountable plan, the arrangement must satisfy three requirements:

Business connection. The expenses must be incurred while performing duties as an employee. For drivers, the per diem covers meals and incidentals during trips away from your tax home.
Adequate substantiation. You must prove the dates, destinations, and business purpose of each trip to your employer. Logbook and electronic logging device records typically satisfy this.
Return of excess. If you receive an advance or allowance that exceeds what you actually spent or the applicable federal rate, you must return the difference within a reasonable period. The IRS treats 120 days after the expense was incurred as a safe harbor.³

Meet all three, and the per diem stays off your tax return. You do not report it, and you do not deduct it. It never becomes income in the first place.

What “Away From Home” Actually Means

Per diem only applies to expenses you incur while traveling away from home for work, and home here does not mean the house you live in. The IRS defines your tax home as your regular place of business or post of duty, including the entire city or general area where that business is located.⁴ For most company drivers, the tax home is the terminal or dispatch location where runs originate, not the city where the family lives.

Publication 463 illustrates this with a driver who lives in Tucson but works out of a terminal in Phoenix. Phoenix is the tax home. That driver cannot claim per diem for meals in Phoenix or for the commute between Phoenix and Tucson.⁴

Drivers with no regular terminal use a three-factor test. The IRS looks at whether you perform work in the area of your main residence, whether you duplicate living expenses because your work keeps you away, and whether you maintain a home where family members live or where you regularly return. Meet all three, and your residence is your tax home. Meet only one, and you are an “itinerant.” Itinerants are never treated as traveling away from home, which means no per diem at all.⁴ This is where claims fall apart for drivers who live full-time in their trucks without keeping a fixed residence.

The sleep-or-rest rule sits alongside the tax home requirement. To qualify for per diem, your relief from duty must be long enough that you need sleep or rest to meet the demands of your work. Napping in the cab on a short break does not count.⁴ For long-haul drivers pulling overnight runs, the requirement is almost always met. Day-haul drivers returning home each evening generally do not qualify.

Current Per Diem Rates for Transportation Workers

The IRS publishes special meal and incidental expense rates for workers subject to Department of Transportation hours-of-service rules, which covers most long-haul truck drivers. Under IRS Notice 2025-54, the transportation industry M&IE rates effective from October 1, 2025, through September 30, 2026, are:

$80 per day for travel within the continental United States (CONUS)
$86 per day for travel outside the continental United States (OCONUS)
$5 per day for incidental expenses only, when meals are provided but incidentals are not⁵

These flat rates replace the need to track individual meal receipts. Your employer pays the applicable daily rate for each qualifying travel day, and as long as the accountable plan rules are met, the entire amount is tax-free to you. For trips of 24 hours or more, standard practice is to pay 75% of the daily rate on the first and last calendar days and 100% for full days in between. The rates do not cover lodging, so drivers who need hotel rooms should confirm whether their employer has a separate lodging arrangement.

Documentation Your Records Need to Show

Your electronic logging device records are the strongest substantiation you have. ELD data automatically captures dates, times, and locations of your duty status changes, which is exactly what the IRS wants: when you left, where you went, and when you returned. Paper logs need the same information recorded consistently, and it must match what payroll has on file. Discrepancies between your logs and your employer’s records are the fastest way for the IRS to reclassify a tax-free reimbursement as taxable wages.

For each trip, your records should document:

The calendar day you departed and the day you returned to your tax home
The cities, states, or localities reached during the trip
A brief note that the travel was for work, which most ELD and dispatch records establish automatically

Because the transportation industry rate is a flat amount, you do not need to save individual meal receipts. The simplified rate exists to eliminate that burden. The underlying trip records proving you were away from your tax home are not optional.

When Per Diem Still Ends Up Taxable

Per diem payments lose their tax-free status in two common scenarios. If your employer pays a flat travel allowance without requiring you to substantiate trips, or pays the same amount whether you travel or not, the IRS treats the whole arrangement as a non-accountable plan. The same applies when a carrier effectively reduces your base pay and relabels part of it as per diem. Every dollar becomes wages, subject to income tax withholding, Social Security, and Medicare, and the full amount lands in Box 1 of your W-2.³ Because you cannot deduct unreimbursed employee expenses federally, you end up paying tax on money meant to cover your road costs.

The second scenario is per diem paid above the applicable federal rate. Even under a legitimate accountable plan, the excess is taxable. If the transportation industry rate is $80 per day and your employer pays $100, the extra $20 gets reported as wages and is subject to withholding and employment taxes.⁶ Some carriers advertise high per diem rates as a recruiting tool without being clear about how the excess is treated. If your rate looks unusually generous, ask payroll whether any portion is being added to taxable wages.

The Social Security Trade-Off

Recruiting ads rarely mention this. When your employer pays per diem under an accountable plan, your W-2 wages drop by that amount. Lower reported wages mean lower Social Security earnings credits, which can reduce your monthly benefit when you retire. A driver earning $65,000 in base pay who receives $15,000 in tax-free per diem has only $50,000 in W-2 wages for Social Security purposes.

The tax savings are real and immediate. You and your employer each avoid 6.2% Social Security tax and 1.45% Medicare tax on the per diem amount, and over a year that adds up to meaningful cash. But if you drive for decades with reduced reported earnings, the cumulative effect on your Social Security benefit is worth calculating. Drivers early in their careers or with a strong existing earnings history may find the tax savings easily outweigh the reduction. Drivers closer to retirement with a marginal earnings record should run the math.

If You Drive as an Owner-Operator Instead

The rules above apply to W-2 company drivers. If you are a 1099 owner-operator, the landscape is different. Self-employed drivers report income and expenses on Schedule C, and the permanent elimination of miscellaneous itemized deductions does not touch them. Owner-operators deduct the standard meal allowance directly on their return without needing any employer plan.⁴ Federal law caps the meal deduction for workers subject to DOT hours-of-service rules at 80% of the expense, rather than the 50% that applies to most other taxpayers.⁷ Using the $80 CONUS rate, an owner-operator would deduct $64 per day on Schedule C, reducing both income tax and self-employment tax.

Your tax filing status settles which set of rules applies. If you receive a W-2, you are a company driver and the personal deduction is off the table. If you receive a 1099, you file Schedule C and deduct per diem directly.

1
Internal Revenue Service. Instructions for Form 2106
2
Internal Revenue Service. Form 2106 – 2025 Employee Business Expenses
3
eCFR. 26 CFR 1.62-2 – Reimbursements and Other Expense Allowance Arrangements
4
Internal Revenue Service. Publication 463 (2025), Travel, Gift, and Car Expenses
5
IRS. Notice 2025-54, 2025-2026 Special Per Diem Rates
6
Internal Revenue Service. Per Diem Payments Frequently Asked Questions
7
Office of the Law Revision Counsel. 26 USC 274 – Disallowance of Certain Entertainment, Etc., Expenses