Church Mileage Reimbursement of Volunteers

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Question:A church has an associate pastor who is unpaid. He drives30 miles each direction from his home to the church, 2 to 3 times per week. Ithas been proposed that a “gift” from the church be made to reimburse hisgasoline costs. It appears that any payment to him would be taxable. Is thereany exception since he is unpaid for his services to the church, and notactually an employee? If not, can he claim his mileage at the charity ratesince he is not a paid employee of the church, but involved in a charitableactivity?

Answer:Any money that the church gives the associate pastor is consideredcompensation because he is performing a service to the church. Employees can bereimbursed at $.555 (2012) for business miles, but not for commuting (theapparent case in this situation). If the pastor continues as a volunteer, hecould claim his mileage at the $.14 per mile charitable rate (2012). Therefore,if he continues as a volunteer, the church could reimburse him up to $.14 permile without tax consequences. Given an average of 2.5 trips per week, thisequals $21 per week (truly a “token”)!

The members of myFederal Taxation I class at Maranatha Baptist Bible College in Watertown,Wisconsin have taken on the challenge of study and research to answer postedquestions. LeslieHarrison of Michigan gets credit for this one.