Mileage reimbursement is generally not considered taxable income if it adheres to IRS guidelines and is provided under an accountable plan. If the reimbursement amount is equal to or less than the standard mileage rate (e.g., 65.5 cents per mile in 2023), it is tax-free for both employers and employees. However, any excess reimbursement beyond the IRS rate or amounts provided without proper documentation could be subject to tax. Non-accountable plans, where the employee doesn’t submit mileage logs or expenses, might also lead to the reimbursement being taxed.