Business mileage log for NEMT vehicles: the IRS record, van by van

How to use this log

Keep one log per van, one page per month. The driver writes the odometer reading when the shift starts and again when it ends, and marks any miles that were not for the business. Once a week, the owner or office manager totals the page and checks it against the day’s manifests.

• Name the van, not the driver. The record the IRS describes is kept for each vehicle. A van driven by three people in a week still has one log.
• One line per shift is enough. A run of pickups and drop-offs that leaves from your lot and returns there is one uninterrupted business use, and IRS Publication 463 lets you record it as a single entry.
• Point to the manifest for the purpose. “Scheduled rider trips, manifest of October 6” states the business purpose, and the daily manifest holds the detail. It also keeps rider names off the log: Publication 463 lets confidential details stay out of the log itself as long as you recorded them somewhere else at the time, and the manifest is that record.
• Split out anything personal. A commute home, an errand, or a personal trip on a day off gets its own line.
• Paper or screen both work. Publication 463 counts a record prepared on a computer as adequate, the same as a written one. Memory alone is not an adequate record.

The log

Vehicle page (once a year for each van)

Daily entries

Example entries (made up, for illustration only):

Monthly totals

Year-end summary

The daily lines should add up to the year’s total. If they fall short, find the missing days before tax time, not during an audit.

What makes the log hold up

IRS Publication 463 sets out the record for car expenses, and “car” there includes a van. Its table of required elements comes down to these items: the purchase cost, the cost of upgrades, when business use started, mileage per business use, annual mileage, and the date, destination, and purpose of each use. The vehicle page and daily lines above cover each item.

• No estimates. The publication says approximated or estimated amounts cannot be deducted. A reading off the odometer is a fact; “about 120 miles” is a guess.
• Written close to the time. An entry made when the driving happens, or soon after, carries more weight than one pieced together later. A weekly log that accounts for the week’s use counts as timely.
• Purpose can be brief. When the purpose is clear from the circumstances, Publication 463 does not require a written explanation. Its example is a sales representative calling on customers along an established route. For a van that only carries riders, a reference to the day’s manifest makes the purpose plain.
• Short personal stops do not break the chain. Stopping for lunch between two riders counts as minimal personal use, so the shift stays one business entry.
• Sampling has limits. You may keep a full record for part of the year only if you can show that period is representative of the whole year. A van’s use can change from month to month, so a full-year log is safer.
• Gaps get rebuilt from evidence. If days are missing, Publication 463 has you prove them with a detailed statement of your own, backed by other evidence. For a van, that means the day’s manifests and trip logs, fuel receipts, and GPS history, never a guess.

At filing time these totals feed the vehicle questions on your return. Part IV of Schedule C asks for the date the vehicle was placed in service, its business, commuting, and other miles for the year, whether it was available for personal use off duty, and whether that evidence is in writing. Businesses that file Form 4562 answer similar questions in Part V.

Which miles count as business miles

Every mile a van drives for the company is a business mile, whether a rider is aboard or not. Publication 463 treats driving from one workplace to another and visiting customers as business transportation. For a NEMT van, that covers the run from your lot to the first pickup, each ride, the gaps between riders, trips to the fuel station or repair shop, and the drive back.

Those empty stretches are deadhead miles. Payers set their own mileage rules. Arizona’s Medicaid fee-for-service manual, for example, has providers bill loaded miles only, meaning the distance traveled with a member on board. That is why the mileage log and the trip log show different numbers.

Commuting is the exception. Driving between home and a main or regular place of work is personal, even when the driver takes calls on the way. If a home office qualifies as the company’s principal place of business, daily trips from home to other work locations in the same business are deductible. For the deduction itself, see NEMT business taxes.

Mileage rate or actual costs

The log is the same either way. The method decides what you do with it.

One more point for your tax preparer: the definition of “car” that Publication 463 uses for depreciation excludes “a vehicle used directly in the business of transporting persons or property for pay or hire.” Ask how that applies to your vans’ depreciation. The mileage log still supplies the business-use figures the return asks for.

Company vans, drivers, and personal use

Most fleets hand vans to employees, which changes who keeps what.

Written vehicle policies. The Form 4562 instructions say an employer meets its record requirement for employee-driven vehicles by keeping one of two written policies, backed by evidence that the policy is followed:

1. No personal use, including commuting. The employer owns or leases the van, keeps it at the business when it is not in use, no driver lives at the business premises, and nobody uses it personally beyond minimal stops.
2. Commuting only. The employer requires the driver to commute in the van for real business reasons, bans other personal use, and includes the value of the commute in the driver’s income. This policy is not available when the commuting employee is an officer, a director, or an owner of 1 percent or more.

An employer that provides more than five vehicles to employees who are not 5 percent owners or related persons does not complete the per-vehicle mileage questions on Form 4562 for those vehicles. It collects the information from the employees and keeps it. A driver’s weekly log is that information.

Drivers using their own cars. When an employee uses a personal car for company errands, reimburse under an accountable plan. The employee accounts for the miles with a record showing mileage, date, place, and business purpose, returns any excess, and does both within a reasonable time. Under Publication 463, accounting for the miles within 60 days and returning any overpayment within 120 days both count as a reasonable time. A mileage allowance at the standard rate meets the federal rate test.

Mileage log and trip log: two different records

A NEMT company needs both. The trip log proves each ride to a payer. The mileage log proves each van’s use to the IRS.

Some Medicaid programs put odometer readings on the trip record itself. Minnesota’s trip records must list the van’s license plate and two odometer readings, one taken when the rider boards and one when the rider gets off. They also show the most direct route’s mileage and how that route was determined. Arizona’s fee-for-service billing manual has drivers note the odometer at every pickup and every drop-off on a Daily Trip Report, and trip miles are the difference.

Reconcile the two once a week. For any van and day, the loaded miles on its trip logs should come to less than the business miles on its mileage log, counting miles that two riders shared only once. The difference is deadhead. A day where the trip logs show more miles than the odometer does points to a recording error that a payer audit would also find. The guide to billing NEMT mileage covers the loaded-mile side.

Keeping the records

Publication 463 says to hold records behind a deduction for 3 years after filing the return that claims it, in general, and that records of a car’s business use are kept for each year of its recovery period. IRS guidance adds that property records stay on file until the statute of limitations closes on the tax year you get rid of the van. File each van’s logs with its purchase papers, fuel and repair receipts, and the maintenance log, and keep them until a few years after the van is sold.

Mileage records in HealthRide

HealthRide records GPS miles and the time of every pickup and drop-off for each ride, and the trip log downloads as CSV or PDF from reports. Driver timecards and hours export from the same place, so the week’s rides and the week’s shifts come from one record. Use them to check each van’s business miles against this log every week.