A fleet that lets drivers take company EVs home has to answer a question the depot never raises: who pays for the electricity in the employee's garage, and how is that measured? The vehicles charge on the employee's household meter, so without a plan the employee subsidizes the company. This article lays out the reimbursement methods, how to set the rate, and the tax and legal questions that are still open. It is not tax or legal advice.
Start with the premise: this is a company vehicle
This applies to an employer-owned or employer-leased vehicle assigned to an employee. An employee who drives a personal EV for work is a different problem, covered by mileage reimbursement rules. The IRS standard mileage rate, 72.5 cents per mile for January 1 to June 30, 2026 and 76 cents per mile for July 1 to December 31, 2026, is for business use of a vehicle the taxpayer owns or leases (IRS Rev. Proc. 2019-46, IR-2025-128). It is not the tool for a company-owned vehicle.
Four ways to measure what the employee spent
Telematics with a geofence. The vehicle's data logger records the kWh added while it sits inside a boundary around the employee's home. Colorado's State Controller uses this for state-issued vehicles: telematics "uses a geofence to track the kilowatt-hours (kWh) of electricity used at an approved User's home," and State Fleet Management runs a monthly report and reimburses. The federal Department of Energy home-to-work guide (January 2025) calls it best practice. It is the most accurate method, and it only counts electricity that went into the company vehicle.
A networked charger the company owns. The company installs a charger at the employee's home that reports kWh. It measures cleanly, but you now own equipment on private property and carry installation and permitting costs.
A separate utility meter or submeter. A networked submeter, or a separate utility EV meter, isolates the vehicle's load. The same DOE guide lists these among the alternatives. It is accurate and costs more to install; whether the utility will allow it, and at what rate, is the employee's utility's call.
Driver logs. The employee records the starting and ending state of charge, and the kWh is estimated from the battery size and the percentage added. The DOE guide gives this formula and ranks it below the options above. It works for a small pilot and is the easiest to dispute.
Setting the rate
Reimbursement is kWh times a price. The DOE guide lists four ways to pick the price:
- The EIA state average residential rate. The U.S. average residential price was 18.16 cents per kWh in August 2026 (EIA Electric Power Monthly, Table 5.6.A, released October 23, 2026). The same table shows California at 29.75, Massachusetts at 30.48 and Illinois at 19.32 cents that month. A national number will over- or under-pay at both ends.
- The utility-territory rate, from EIA or a utility rate database.
- A per-employee rate from the employee's own bills.
- A flat monthly rate.
Colorado shows what a published policy looks like. Its Energy Office sets a blended rate that includes the per-kWh rate, riders, tax and franchise fees, reviews it each January, and publishes it: $0.1660 per kWh for most utilities and $0.1998 for Black Hills, effective January 1, 2026. It also says the state is billed only for electricity used to charge state vehicles. Employees who charge on a time-of-use plan can pay very different prices at night and in the afternoon, so an employee-specific rate is fairer if your drivers are on different plans.
The tax question is open
The IRS has not published a rule specific to reimbursing home charging of an employer vehicle. We searched Publication 15-B (2026) and found no mention of electric vehicles or charging. What exists is the general framework for employer-provided vehicles, and applying it to electricity is an inference:
- Personal use is taxable. Under Treas. Reg. 1.61-21, fuel provided or reimbursed for personal use is valued separately for inclusion in the employee's income, and reimbursed fuel is generally valued at the amount reimbursed. If electricity counts as fuel, the personal share of the home charging reimbursement is wages.
- Business use can be excluded. Publication 15-B says a working condition benefit for a vehicle used for both business and personal driving is the business-use part.
- An accountable plan needs substantiation. Under Treas. Reg. 1.62-2, reimbursements are excluded from wages only if they have a business connection, are substantiated within a reasonable time, and any excess is returned. A flat stipend with no records is the weak point. The DOE guide tells agencies to coordinate with legal and procurement on the tax implications of a flat rate.
Which rule applies depends on how the employer values the employee's personal use of the vehicle. Pub 15-B describes three regimes: the annual lease value rule (fuel valued separately, as above), the cents-per-mile rule (the rate "includes the value of fuel you provide," so separately valuing reimbursed electricity would count it twice), and the commuting rule. The commuting rule values each one-way commute at $1.50, and it applies only when the employer provides the vehicle for business use and, for bona fide noncompensatory reasons, requires the employee to commute in it, under a written policy that bars other personal use. Pub 15-B does not say whether reimbursed home electricity is additional income under the commuting rule, and we found no IRS text that does. Have a tax advisor choose the regime, decide how home charging is treated under it, and write that into the policy.
State employment law may also apply
Some states require employers to reimburse necessary business expenses. California Labor Code 2802 requires an employer to "indemnify his or her employee for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties." Illinois's 820 ILCS 115/9.5 requires reimbursement of "all necessary expenditures or losses incurred by the employee within the employee's scope of employment" that the employer authorized or required, with documentation due within 30 days. Massachusetts's closest rule, in the state's minimum wage regulations (454 CMR 27.04(4)(d)), requires reimbursing transportation expenses when an employee is directed to travel between locations during the workday.
We found no primary source, statute, rule or agency guidance applying any of these to home charging of an employer-owned vehicle, and none of the three mentions electric vehicles. The safe reading is that these laws are a reason not to leave the employee unpaid, not a prescription for a method. If you operate in these states, have employment counsel review the policy.
Screening drivers and writing the policy
Not every driver belongs in a take-home program. Daily mileage against the vehicle's range, whether the employee has a garage or driveway outlet, and whether a renter's landlord allows charging all matter. The Colorado policy page we read does not say renters are excluded, and we found no guidance either way. The DOE guide handles employees in multifamily housing separately, by letting them expense charging at community or public stations.
A workable written policy covers who is eligible, the measurement method, the rate and how often it is reset, a monthly reimbursement cycle, what happens when a driver also charges a personal vehicle on the same outlet, and the tax treatment decided with your advisor. If you want a first estimate of what a vehicle costs to charge at home, the home charging cost calculator and the cost to charge guide use residential rates. For the depot side of a fleet, see Fleet Depot Electrical Infrastructure and Fleet Electrification ROI. If you are weighing a workplace charging benefit for employees' personal vehicles instead, see Is Workplace EV Charging a Tax-Free Benefit?.
What we could not confirm
We did not find an IRS notice on home-charging reimbursement, any California, Massachusetts or Illinois guidance applying their expense laws to it, or a General Services Administration policy. Geotab, a telematics vendor, markets a home-charging reimbursement product and says its receipts are compliant; that is a vendor claim we did not verify.
Last factually verified: November 2, 2026, against IRS Publication 15-B (2026), Treas. Reg. 1.61-21 and 1.62-2, Rev. Proc. 2019-46, IRS standard mileage rate releases, EIA Electric Power Monthly Table 5.6.A (August 2026 data), DOE FEMP Federal Home-to-Work EV Program Guide (January 2025), the Colorado State Controller EV home-charging policy and rate page, Cal. Lab. Code 2802, 820 ILCS 115/9.5 and 454 CMR 27.04.
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