2011 Virginia Legislators' Tax Guide: IRS Section 162(h) Election


The tax code provides for a simplified method of accounting for travel expenses for electing state legislators. If a state legislator lives more than 50 miles from his or her state capital, he or she can elect IRS §162(h), which provides a formula for determining the amount of deductible travel expenses the legislator can claim as unreimbursed business expenses on Form 2106. Instructions for the form can be found by clicking here. The deduction is based on the total legislative days during the year multiplied by the federal per diem rate.

Election

The election is made by attaching this form to the taxpayer's return. The election can even be made for a prior tax period by filing an amended return, recalculating expenses according to the form and attaching the statement to the amended return.

Legislative Days (Section I)

The election is available for any day that the legislator is in session or in a committee meeting. Note, also, that if the legislator was not actually in session, but the session break was four consecutive days or less, the interim days are counted as session dates. For example, the legislature has a break of three days, Friday, Saturday and Sunday, but the legislator attended the session on Thursday and Monday. Even though the legislator was not actually in session for the extended weekend, because the break is less than four consecutive days, those days count as session days.

Per Diem Rates (Section II)

The potential deduction is based on the number of legislative days times the federal per diem rate. The federal per diem rates have been included on the election statement for your calculation. You can access the appropriate IRS form by clicking here.

Reimbursed Expenses (Section III) 

If you have been reimbursed for any of your travel expenses, include the total of those reimbursements on line 7 of Form 2106. Reimbursement of lodging should go in column A. Reimbursement of meals should go in column B. If you were reimbursed for a certain number of days based on the federal per diem rates, use the calculation on the election form.