QB Issue Resolution:

You are deducting mileage or you are deducting actual costs. Doesn’t matter since you are expensing at some point the auto costs. Everything you receive from the state is income. You can split it into two income accounts in your CoA. But you don’t have to, al you need do is report it all as income

Resolution for Issue 'Proper handling of mileage reimbursement paid by client' available: Yes (Solved).
Source: Intuit Community forum.

Proper handling of mileage reimbursement paid by client: this issue or error code is a known issue in Quickbooks Online (QBO) and/or Quickbooks. Support for this issue is available either by self-service or paid support options. Experts are available to resolve your Quickbooks issue to ensure minimal downtime and continue running your business. First try to resolve the issue yourself by looking for a resolution described below. If it is a complex issue or you are unable to solve the issue, you may contact us by clicking here or by using other support options.

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