Generally, if your wife submitted her mileage to her employer and the employer "reimbursed" her based on those specific miles, it is a tax-free arrangement (an "Accountable Plan").
If the employer did not do that (such as giving her a flat amount or some other method not based on mileage that she submitted), it is taxable wages. Her employer should have included that on her W-2.
So either way, you don't need to do anything when preparing your taxes to report that income.
In the event it was NOT an "Accountable Plan" (it was taxable and added to her W-2) or if the Accountable Plan reimbursement was less the IRS maximum, you MIGHT be able to get a deduction for that expense. It is no longer deductible on the Federal return, but some States still allow it as a deduction (but it is usually subject to limitations, so it still may not benefit you).
