Volunteer Mileage Reimbursement and Deduction

The Issue
A charity’s ability to reimburse volunteers for expenses incurred while volunteering plays a huge role in nonprofit organizations’ abilities to recruit and retain volunteers, especially as gas and energy prices continue to soar. Currently, charities may reimburse volunteers, on a nontaxable basis, up to the charitable mileage rate of 14 cents per mile. That rate has not changed since 1997 and no longer covers the price of gas. In addition, if charities reimburse their volunteers more than the 14 cent mileage reimbursement rate, volunteers pay taxes on the additional amount because it is treated as income thus, taxing individuals for donated services.

MANP’s Position
Congress should take action to exempt reimbursement of mileage from income and raise the volunteer standard deduction to a reasonable rate.

Congressional Action:
More than 12 proposals were submitted to the 110th Congress in the spring of 2008. All proposals would have either (1) allowed nonprofit organizations to reimburse volunteers (without income tax consequences) for mileage driven for charitable purposes up to the business mileage rate, or (2) increased the mileage deduction allowed for charitable purposes.

One of the proposals, the Giving Incentive for Volunteers Everywhere (GIVE) Act of 2008, gained momentum in the Senate, but ultimately was not passed.

In January 2009, The Giving Incentives for Volunteers (GIVE) Act of 2009 (S 243)/ (HR 524) was reintroduced by Senator Cardin in the Senate and by Rep. John Lewis in the House. 

The GIVE Act would:

• Give the Treasury Department the ability to change the volunteer mileage deduction rate, which has been fixed in statute at 14 cents per mile since 1997;
  
  
• Raise the volunteer mileage deduction immediately to 24 cents per mile and ensure it doesn't fall below the rate for medical mileage expenses (currently 24 cents per mile), and;
  
  
• Exempt from a volunteer’s taxable income any reimbursement by a charity for mileage up to the business rate (currently 55 cents per mile). 

Also in January 2009, Congressmen Petri (WI-R), Campbell (CA-R), and Platts (PA-R) introduced the Charitable Driving Tax Relief Act (HR 590) focused only on the reimbursement side, the less costly aspect of relief. Their bill would exclude from taxpayer income any reimbursements received by a nonprofit for volunteer driving up to the standard mileage rate - today 55 cents.

Last year, we supported the original GIVE Act, S.3532 and its companion bill in the House, H.R.6854, though they did not get introduced into law.  

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