California Mileage and Vehicle Tax Records (2026): FTB Rules, Rideshare and Robotaxi Permits
General information, not tax or legal advice. Talk to your tax preparer or attorney about your situation.
California taxes income but doesn't copy every federal vehicle rule. It caps Section 179 at $25,000, doesn't allow federal bonus depreciation, and, unlike federal law, still lets employees itemize unreimbursed job expenses on Schedule CA (540). Rideshare companies answer to the CPUC; paid driverless rides need DMV and CPUC permits.
California often parts ways with the federal vehicle rules. This guide summarizes what the Franchise Tax Board (FTB), the CPUC and the DMV publish as of October 16, 2026.
The federal baseline every California 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 California treats vehicle deductions
California starts from your federal figures and then adjusts them on Schedule CA (540). For a self-employed driver, the business-mileage or actual-expense figure on federal Schedule C usually carries over. Depreciation is where the two returns split.
Section 179 and bonus depreciation
The FTB's 2025 instructions for Form FTB 3885A say the California Section 179 maximum is $25,000, reduced when the cost of Section 179 property placed in service during the year exceeds $200,000. The same instructions list additional depreciation under IRC Section 168(k), the federal bonus depreciation, among the provisions where California differs. They also say California doesn't conform to the federal changes to the luxury-automobile depreciation limits in IRC Section 280F.
In practice, if you expensed a work vehicle federally with Section 179 or bonus depreciation, California usually needs its own depreciation schedule for the same car, and the difference shows up as an adjustment on Schedule CA. Keep the cost and placed-in-service date for it. See why business-use percentage matters.
Unreimbursed employee expenses
Federal law suspends miscellaneous itemized deductions subject to the 2% floor. The FTB says plainly: "California law does not conform." On Schedule CA (540), line 19 is for unreimbursed employee expenses. The instructions tell you to prepare federal Form 2106 using California amounts and enter its line 10 total, and Part II applies a floor of 2% of federal AGI to lines 19 through 21. So a W-2 employee who drives a personal car for an employer without full reimbursement may have a California itemized deduction even with no federal one. Commuting still doesn't count.
Worker classification
The FTB notes that some people are independent contractors for federal purposes but employees for California purposes, and that Proposition 22, operative December 16, 2020, may affect a worker's classification. Classification decides whether your miles belong on Schedule C or on the California Form 2106, so settle it with your preparer first.
Rideshare (TNC) rules in California
The CPUC regulates transportation network companies: companies that use an app to connect passengers with drivers using personal vehicles. The CPUC issues TNC permits, sets insurance requirements and collects required reports from the companies. For your taxes, the platform's annual summary is supporting evidence, not your log. See which rideshare miles count.
Robotaxis and driverless cars in California
The California DMV authorizes manufacturers to test and deploy autonomous vehicles under three permit categories: testing with a safety driver, driverless testing and deployment. Carrying passengers is a second layer run by the CPUC. Its Autonomous Vehicle Programs page says no fares may be charged in the pilot programs, while Phase I deployment programs allow fares. Deployment applicants need a DMV Autonomous Vehicle Deployment Permit, and driverless applicants must submit Passenger Safety Plans. These are company-level permits; for a broader comparison see robotaxi permits and taxi medallions.
What to keep in your California 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 claimed Section 179 or bonus depreciation federally: the vehicle's cost, purchase and placed-in-service dates, so a separate California depreciation figure can be worked out (FTB 3885A).
- If you're a W-2 employee: unreimbursed business miles kept apart from commuting, plus any reimbursement your employer paid, for the California version of Form 2106.
- For rideshare: the platform's annual tax summary alongside your own log; the summary doesn't replace the log.
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
A California 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)
- FTB, 2025 Instructions for Schedule CA (540)
- FTB, 2025 Instructions for Form FTB 3885A
- CPUC, Transportation Network Companies
- CPUC, Autonomous Vehicle Programs
- California DMV, Autonomous Vehicles
- IRS, Standard mileage rates; IRS Publication 463; IRS Topic 510
Frequently asked questions
Can California employees deduct unreimbursed mileage?
Possibly. California doesn't conform to the federal suspension of miscellaneous itemized deductions. Unreimbursed employee expenses go on Schedule CA (540), line 19, figured on a California version of Form 2106 and subject to the 2% of federal AGI floor (FTB Schedule CA instructions). Ask your preparer.
What is California's Section 179 limit for a work vehicle?
$25,000, reduced when Section 179 property placed in service during the year costs more than $200,000, according to the FTB's 2025 Form 3885A instructions.
Does California allow federal bonus depreciation?
The FTB lists IRC Section 168(k) additional depreciation as a federal–state difference, so a vehicle with federal bonus depreciation usually needs a separate California depreciation figure.
Who regulates rideshare companies in California?
The California Public Utilities Commission permits TNCs and sets their insurance and reporting requirements.
Can a driverless car charge fares in California?
Only in the CPUC's deployment programs, which require a DMV Autonomous Vehicle Deployment Permit; the CPUC pilot programs don't allow fares (CPUC AV Programs).
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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