Alabama Mileage and Vehicle Tax Records (2026): Employee Expenses, PSC Rideshare Permits and Automated Trucks
General information, not tax or legal advice. Talk to your tax preparer or attorney about your situation.
Alabama figures business income on its own Form 40, so self-employed drivers report Schedule C income after Alabama adjustments. Unlike the federal return, Alabama still lets employees who itemize deduct unreimbursed job expenses above 2% of Alabama AGI, with Form 2106 for car costs. Rideshare companies need a Public Service Commission permit.
Alabama doesn't start from federal adjusted gross income, and it kept the employee expense deduction the federal return suspended. This guide covers what the Alabama Department of Revenue, the Public Service Commission and the Legislature say as of October 16, 2026.
The federal baseline every Alabama driver starts from
Most vehicle deductions begin on your federal return. If you're self-employed, you can generally use the standard mileage rate or actual expenses for the business share of your car (IRS Topic 510). For 2026 the business rate is 72.5¢ per mile for January 1 to June 30 (IR-2025-128 / Notice 2026-10) and 76¢ per mile for July 1 to December 31 (IR-2026-29 / Announcement 2026-11) (IRS standard mileage rates). EVs use the same rates; see the 2026 EV mileage rate guide. Most employees can't deduct unreimbursed car expenses federally (Topic 510). IRS Publication 463 asks for each business trip's miles, date, destination and purpose, plus total miles. Commuting stays personal (commuting vs business miles).
How Alabama treats vehicle deductions
The 2025 Form 40 instruction booklet has you report business income from federal Schedule C on line 2, after any Alabama adjustments. So your mileage or actual-cost vehicle deduction still comes from the same log. The booklet says depreciation is a reasonable allowance for exhaustion, wear and tear, and that Section 179 expensing is allowed for tax years beginning after December 31, 1989. Ask your preparer whether your Alabama depreciation differs from federal. See robotaxi fleet depreciation and Section 179.
Unreimbursed employee expenses
Federal law suspended most employee job expense deductions, but Alabama didn't. On Alabama Schedule A, line 20 covers unreimbursed employee business expenses, and the booklet says you fill out Form 2106 first if you claim travel or transportation expenses for your job. Only the amount above 2% of your Alabama AGI (Form 40, line 10) counts, figured on lines 22 to 24. It only helps if you itemize on the Alabama return. If your employer doesn't reimburse mileage, your log supports this deduction.
Rideshare (TNC) rules in Alabama
Alabama's 2018 TNC law (HB 190, Act 2018-127, effective July 1, 2018) requires a TNC to get a permit from the Public Service Commission before operating, and the commission may require annual renewal. The PSC's TNC page says renewal applications are due on or before July 1 each year. The law also sets a local assessment fee of 1% of the gross trip fare. After each trip, the TNC sends an electronic receipt listing the origin and destination, total time and distance, total fare and the driver's first name. The TNC keeps individual trip records for at least two years. Keep your own receipts and annual summaries too. See which rideshare miles count.
Robotaxis and automated vehicles in Alabama
Alabama's 2019 law (SB 47, Act 2019-496) covers automated commercial motor vehicles, meaning commercial motor vehicles equipped with an automated driving system. It lets them operate without a conventional driver physically present if the system can reach a minimal risk condition after a failure, and it sets insurance of at least $2 million. It doesn't address passenger robotaxis. If you're planning a driverless passenger fleet in Alabama, talk to an attorney about current law. For fleet records, see robotaxi fleet tax basics.
What to keep in your Alabama records
- Each business trip's date, start, destination, purpose and miles, plus total miles for the year (Pub 463); a weekly log counts as timely kept.
- Separate Business, Commute and Personal totals for Form 4562 Part V.
- Keep records until the period of limitations runs out, generally 3 years federally (IRS); ask your preparer about the state period.
- If you're an employee: keep Form 2106 figures, reimbursement policies and any reimbursements received.
- For rideshare: save electronic trip receipts and annual summaries.
For the full list of log fields, see what the IRS asks you to record.
Example: 1,000 hypothetical business miles driven in September 2026 × 76¢ (IR-2026-29) = $760 at the federal standard rate. Miles driven in March 2026 would use 72.5¢ (IR-2025-128) instead, so keep each trip's date. Estimates, not tax advice.
One log for both returns
An Alabama return doesn't call for a second mileage log; your preparer works from the same business, commuting and personal miles. CyberDeduct builds a mileage log around IRS Pub 463 from your Tesla's own trip and odometer data (Model S, 3, X, Y and Cybertruck). You connect your Tesla account once through Tesla's standard account sign-in (OAuth); CyberDeduct never sees or stores your password. Home/work rules and route templates label most trips Business, Commute or Personal; you tap to change any label and confirm the purpose. The dashboard shows your business-use percentage and warns you on the 28th if you're under 50%. You export a PDF or CSV log plus a Form 4562 Part V worksheet for your preparer. See how the log is built or see plans.
Sources (checked October 16, 2026)
- Alabama Department of Revenue, 2025 Form 40 instruction booklet
- Alabama Department of Revenue, 2025 Schedules A, B, D, E
- Alabama Legislature, HB 190 (2018, enrolled)
- Alabama Public Service Commission, TNCs
- Alabama Legislature, SB 47 (2019, enrolled)
- IRS, Standard mileage rates; IRS Publication 463; IRS Topic 510
Frequently asked questions
Can Alabama employees deduct unreimbursed mileage?
Yes, if you itemize. Alabama Schedule A, line 20 covers unreimbursed employee expenses above 2% of Alabama AGI, with Form 2106 for travel or transportation.
Does Alabama start from federal AGI?
No. Form 40 builds income line by line; business income from Schedule C goes on line 2 after Alabama adjustments.
Does Alabama allow Section 179?
The 2025 Form 40 booklet says Section 179 expensing is allowed for tax years beginning after December 31, 1989.
Do Alabama rideshare companies need a permit?
Yes. The 2018 TNC law requires a Public Service Commission permit, and the PSC says renewals are due by July 1 each year.
Are driverless trucks legal in Alabama?
The 2019 law (SB 47) lets automated commercial motor vehicles operate without a conventional driver present if they meet its conditions, including $2 million in insurance.
This article is general information, not tax or legal advice. Talk to your tax preparer or attorney about your situation. State laws and bill status change; check the linked sources for the current text.
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