Removal of per diem tax deduction costing employee truck drivers thousands

A change to the tax law in 2017 cost employee truck drivers thousands of dollars each year in deductions. The Owner-Operator Independent Drivers Association is working to restore the deduction.

In March, OOIDA sent a letter to the Republican members of the House Ways and Means and the Senate Finance committees asking them to “fix an unintended consequence” of the Tax Cuts and Jobs Act.

Employee truck drivers had been allowed to deduct 80% of the per diem rate in expenses for meals while on the road from their taxes until the Tax Cuts and Jobs Act of 2017 eliminated the provision.

The tax bill eliminated several miscellaneous deductions but increased the amount of a worker’s standard deduction. However, the math did not work out to the benefit of company truck drivers.

“While the Tax Cuts and Jobs Act preserved the standard per diem deduction for owner-operators or those leased to large motor carriers, truckers classified as company drivers lost this benefit, which many indicate has directly impacted their bottom line,” OOIDA President Todd Spencer wrote. “We heard from members who received an unexpected tax hike after the Tax Cuts and Jobs Act was enacted – for as much as thousands of dollars more than they had anticipated. As part of reconciliation, Congress must restore employee drivers’ ability to deduct daily meal expenses while on the road and maintain the current benefit for owner-operators.”

Stuart Hochfelder, an OOIDA member from Illinois, told Land Line last year that the removal of the per diem delivered a large financial blow.

“It meant that there’s about $20,000 per year that I can no longer write off,” Hochfelder said. “It really hurt. I can no longer write off union dues, meal expenses or anything else that I used to. It has had a big impact.”

OOIDA is asking Congress to address the problem.

“Since this problem has not been addressed, there are many company drivers who are still paying more in federal taxes today than they were before the Tax Cuts and Jobs Act,” Spencer wrote. LL