Current law allows charities to reimburse volunteers, on a nontaxable basis only, up to the charitable mileage rate of 14 cents per mile. Alternatively, volunteers are permitted to deduct their “out of pocket” expenses incurred in providing donated services — when those expenses are not reimbursed.
The Internal Revenue Service (IRS) has the authority to regulate volunteer mileage rates for business and medical/moving purposes, but not for charitable activities. The charitable rate can only be adjusted through the legislative process, and has remained unchanged since 1997.
Legislation in the 113th Congress
In March 2013, Sen. Tom Petri (R-WI) introduced the Charitable Driving Tax Relief Act (H.R. 1212) which allows volunteers for recognized nonprofits to exempt from their taxable income any reimbursements they have received for driving a passenger vehicle as part of their volunteer work. Reimbursement is deductible up to the level of for-profit mileage reimbursement (see Background below), and can only be claimed by drivers working on a volunteer basis.
The proposed legislation is similar to previously unadopted legislation from Sen. Benjamin Cardin (D-MD), who introduced the Giving Incentives to Volunteers Everywhere (GIVE) Act in 2009, to address the inequities between the charitable rate and those for business and medical/moving purposes. The GIVE Act would have:
The IRS on December 6, 2013 announced the standard mileage rates used to calculate the deductible costs of operating an automobile for business, medical/moving, and charitable purposes for 2014. The rates are: