HR Quick Take: Volunteer Mileage

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Q: Our nonprofit organization accepts donations and volunteers drive these donated items between our multiple locations. Is this an issue and can I pay them mileage for the time?

A: Driving creates some added liability for any employer as you cannot control the environment and if an accident happens, it can be catastrophic.  You can mitigate some risk by routinely checking for current driver’s licenses for the type of vehicle to be driven, running a periodic driving record check, and make sure your insurance (as well as their personal insurance) covers the activity.

Transporting passengers

If volunteers are transporting passengers, more thorough background checks and other policies are recommended due to substantive additional liability concerns.  You also want to know if they lose their license or have any restrictions on their driving. 

Reimbursement

You can reimburse volunteers at a rate of 14 cents per mile on a tax-free basis.  Anything above this amount would need to be taxed.  Alternatively, volunteers can deduct the actual costs of operating their vehicle - which would almost exclusively include gas and oil.  Depending on the vehicle’s gas mileage, it may be more lucrative in some situations for the volunteer to forego the reimbursement and deduct on their own tax return if they itemize.  Given fewer people are itemizing since the standard deduction increase in 2018, some volunteers are likely to benefit more from the 14-cent reimbursement.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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