The Owner-Operator Independent Drivers Association is asking Congress to restore the per diem tax deduction for employee truck drivers.
On Tuesday, March 4, OOIDA sent a letter to the Republican members of the House Ways and Means Committee 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.”
Tax Fairness for Workers Act
In the 118th Congress, the Tax Fairness for Workers Act was introduced in the House and Senate. The bill aimed to ease the tax burden on workers by allowing them to deduct common employment expenses, such as travel and uniform costs. It also aimed to reinstate the per diem deduction for company drivers.
The House version of the bill gained 204 co-sponsors, while the Senate version had 40.
The Tax Fairness for Workers Act has yet to be reintroduced in the 119th Congress.
Reconciliation
OOIDA is asking the House Ways and Means Committee 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.
OOIDA added that the removal plays a role in trucking’s massive driver turnover problem.
“Low wages and difficult working conditions have resulted in excessive driver turnover within the trucking industry,” Spencer wrote. “Your committee has the ability to help make trucking a much more attractive and sustainable career for countless Americans by preserving the per diem benefit for owner-operators and reinstating it for employee drivers. We strongly encourage you to make this a priority in any reconciliation package that comes before the committee.” LL
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