News and analysis
March 18, 2013

House Bill Would Improve Tax Benefit for Volunteers’ Mileage

Volunteers who drive their own cars to perform charity work would get the same tax benefits for mileage reimbursements as people who drive as part of their paid jobs at a business, under a new bill introduced in Congress on Friday.

The bill, called the Charitable Driving Tax Relief Act, also proposes to reduce paperwork for charities by eliminating the requirement that they report mileage reimbursements to the Internal Revenue Service.

The main thrust of the proposed legislation, introduced by Rep. Tom Petri, a Wisconsin Republican, is to change the tax code governing what volunteers can deduct for car costs related to charitable work.

Under current law, volunteers may deduct 14 cents per mile for car costs or be reimbursed by a charity at that rate without the payment being counted as federal taxable income. Any reimbursements above that rate are subject to federal income tax.

But for employees who drive for businesses, the rate is 56.5 cents.

“This is inconsistent and unfair,” said Mr. Petri in a statement. “If someone is delivering for Meals on Wheels or taking someone to the hospital or making any trip as part of a charity, they should be treated the same as they would if they were working for profit.”

The tax law “discourages volunteer activity,” the statement added.

In 2008, the House passed similar legislation, but the measure did not pass the Senate.