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Volunteer Mileage Reimbursement
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Volunteer drivers may exclude mileage reimbursement payments from their income only to the extent they would be able to deduct the expense as a charitable contribution.
They may exclude one of these amounts for each mile driven, including unreimbursed miles:
- Optional, standard mileage rate for charitable activities of 14 cents per mile.
- Actual vehicle expenses, such as gas and oil, directly related to the charitable purpose
Note: Beginning with tax year 2021, you may be able to subtract reimbursements exceeding 14 cents per mile on your Minnesota income tax return.
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A volunteer driver transports persons or goods on behalf of a nonprofit entity or governmental unit in a private passenger vehicle and receives no compensation for services provided other than reimbursement of actual expenses.
Employees receiving wage compensation are not considered volunteer drivers if providing the same type of services they are employed to provide.
If you receive mileage reimbursement for charitable activities, you may need to include the payments on your income tax return.
- Report mileage reimbursements above the exclusion amount as income
- Report any other taxable payments as income
You may not need to include reimbursements under certain volunteer programs. For details, see IRS Publication 525 and consult your tax professional.
How much can I reimburse volunteers for mileage?
You can reimburse for mileage at any amount. The volunteer may owe tax if the reimbursement rate is more than 14 cents per mile.
Do I need to issue volunteers a federal Form 1099-MISC?
You must issue a Form 1099-MISC to a volunteer if both of these apply:
- You reimbursed the volunteer more than 14 cents per mile
- You paid the volunteer $600 or more during the calendar year
If you received mileage reimbursement in volunteer service for an organization eligible for a charitable contribution under Internal Revenue Code, section 170(c), you may subtract the amount you received. For details about qualified organizations for deductible contributions, see IRS Publication 526.
You may subtract any amount exceeding the 14-cent-per-mile volunteer mileage rate on your Minnesota return, up to the 2022 cap of 58.5 cents per mile for January 1 through June 30, and 62.5 cents per mile for July 1 through December 31 of 2022.
Complete Schedule M1M, Income Additions and Subtractions, to claim this subtraction from Minnesota income.
For more information, see Minnesota Statute 290.0132, subdivision 30.
