What is the limit on employer compensation for laundry?

August 19, 2011

From:  Kraig
Date:  Thu, 27 Aug 2009
Subject:  Question regarding Uniform cleaning allowance

Is there a limit on the amount an employer can give for their employees to clean and maintain their work-specific clothing? Can you point to an IRS Code that addresses this to employers?

Thank you,
Kraig

Answer

Date:  4 Sep 2009

Hello Kraig,

Cleaning costs for employee uniforms are deductible as ordinary and necessary business expenses under Internal Revenue Code Section 162(a).

There is no specific Code section that specifies deductions for these expenses. The rules have been spelled out in rulings by the courts and the IRS over the years. No limit has been specified, but the amount should be reasonable for the employer's circumstances.

In order to be deductible, the clothing must be distinctively for the employee's work and not suitable for ordinary street wear. Examples of distinctive clothing are uniforms for police officers, firemen, letter carriers, nurses, bus drivers, and train conductors.

The cost of purchasing and maintaining clothing worn to protect the body from possible injury relating to the worker's employment is also tax deductible, even if the clothing would otherwise be suitable for street wear. (This item is challenged and can be hard to qualify for.)

It would probably be worthwhile to consult with a tax advisor about your particular situation.

Good luck!


Mike Gray

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