Pennsylvania Mileage and Vehicle Tax Records (2026): Schedule UE, No Bonus Depreciation, TNC and HAV Law
General information, not tax or legal advice. Talk to your tax preparer or attorney about your situation.
Pennsylvania lets employees deduct unreimbursed business mileage on PA Schedule UE at the federal standard rate, unlike the federal return. Its 2025 instructions say to use the higher rate when the IRS changes it mid-year. Pennsylvania doesn't allow bonus depreciation. Rideshare companies hold PUC licenses, and Act 130 allows driverless highly automated vehicles.
Pennsylvania is one of the states where a W-2 employee's mileage log still matters on the state return. This guide covers what the Pennsylvania Department of Revenue and the Pennsylvania Consolidated Statutes say as of October 16, 2026.
The federal baseline every Pennsylvania 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 Pennsylvania treats vehicle deductions
Pennsylvania's personal income tax is figured at 3.07% for 2025, and the 2025 PA-40 instructions say Pennsylvania doesn't allow standard deductions, personal exemptions or itemized deductions. Self-employed drivers report business income on PA Schedule C.
Schedule UE: employee mileage still counts
The Department's unreimbursed business expenses page says employees can claim allowable unreimbursed expenses on PA Schedule UE. On line 6 you multiply business miles by the federal mileage allowance. The 2025 instructions add: if the IRS changed the allowance during the year, use the higher one and don't use both. That matters for 2026's mid-year change; check the 2026 instructions when they're published. Commuting isn't deductible, and you can't claim depreciation on a vehicle using the standard rate. The REV-489 tips add that if your employer reimburses below the federal rate, the difference isn't deductible. The instructions say to keep receipts and records for at least four years.
Depreciation
The 2025 instructions say Pennsylvania personal income tax doesn't follow the federal bonus depreciation allowances, and assets with federal bonus depreciation use straight-line depreciation for Pennsylvania. Section 179 follows Department Bulletin 2023-02. See standard mileage vs actual expenses.
Rideshare (TNC) rules in Pennsylvania
Under 66 Pa.C.S. Chapter 26, a TNC needs a license from the Public Utility Commission (section 2604). The chapter doesn't apply to service originating in a city of the first class (Philadelphia), which has a separate framework (section 2603). Insurance must cover 50/100/25 liability while you're logged on and $500,000 during a ride (section 2603.1). The company keeps driver and vehicle records for at least three years (section 2604.1). It also sends riders an electronic receipt showing origin, destination, mileage and time (section 2607). See which rideshare miles count.
Robotaxis and highly automated vehicles in Pennsylvania
PennDOT's automated vehicles page says Act 130, signed in November 2022, legalized commercial operation of highly automated vehicles at SAE Levels 3 to 5, with or without a human driver, and made PennDOT the sole regulator. Under 75 Pa.C.S. Chapter 85, operators need a certificate of compliance. In driverless operation the automated driving system must be engaged and able to reach a minimal risk condition (section 8508). Section 8509 lets a PUC-licensed TNC use a certificate holder's vehicles, and bars the PUC from requiring a human driver. For fleet records, see robotaxi fleet tax basics.
What to keep in your Pennsylvania 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.
- For Schedule UE: business miles by employer, any reimbursements and rates, and your employer's expense policy or letter; keep them at least four years (2025 PA-40 instructions).
- If you claimed federal bonus depreciation: the cost and placed-in-service date, since Pennsylvania uses a different depreciation figure.
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 Pennsylvania 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)
- PA Department of Revenue, 2025 PA-40 instructions
- PA Department of Revenue, Unreimbursed business expenses
- PA Department of Revenue, REV-489 Tips for PA Schedule UE
- 66 Pa.C.S. Chapter 26
- PennDOT, Automated vehicles
- 75 Pa.C.S. Chapter 85
- IRS, Standard mileage rates; IRS Publication 463; IRS Topic 510
Frequently asked questions
Can Pennsylvania employees deduct unreimbursed mileage?
Yes, on PA Schedule UE, using business miles times the federal mileage allowance, if the expenses are required for your job and unreimbursed. Commuting doesn't count.
Which rate does Pennsylvania use when the IRS rate changes mid-year?
The 2025 PA-40 instructions say to use the higher allowance and not both. Check the 2026 instructions for the 72.5¢ and 76¢ periods.
Does Pennsylvania allow bonus depreciation on a vehicle?
No. The 2025 instructions say PA personal income tax doesn't follow federal bonus depreciation, and those assets use straight-line depreciation.
Do Pennsylvania's TNC rules apply in Philadelphia?
No. 66 Pa.C.S. section 2603 excludes service originating in a city of the first class, which has its own framework.
Can a robotaxi run without a driver in Pennsylvania?
Yes. Act 130 allows highly automated vehicles with or without a driver for certificate holders, regulated by PennDOT.
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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