: Can a business reimburse travel booked with award miles? We have an employee who booked business travel using a combination of credit card (cash) and his award miles (Chase points). He is now requesting a reimbursement of

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If self-employed, only the 00 could be claimed as business expense, the 0 is a discount on a service so would have no bearing on taxes one way or the other.

I'm confident in the claim above, pretty confident too that if you choose to reimburse the employee 00, only 00 is expense reimbursement, 0 is pay subject to income tax, they are making money on this transaction as points aren't money.

The closest IRS source I could find is IRS Publication 463, which states:

IF you have expenses for transportation then you can deduct the cost
of... travel by airplane, train, bus, or car between your home and
your business destination. If you were provided with a free ticket or
you are riding free as a result of a frequent traveler or similar
program, your cost is zero. If you travel by ship, see Luxury Water
Travel and Cruise Ships, under Conventions, earlier, for additional
rules and limits.

While it doesn't explicitly mention partial payments via reward, the concept is similar, you can't claim an expense for which there was no actual cost. Similarly you can't claim charitable contribution for donated points. Conversely an individual isn't taxed on points received, you just can't double-dip by claiming an expense for which there was no actual cost.

There are gobs of non-IRS sources that indicate inability to deduct rewards purchases as business expenses, I'm sure an accountant type can give a more technical and complete answer.