Below are questions from an email sent by Kathy Ryan. kryan@co.aitkin.mn.us Please respond in this feed. We are testing this and I'm sure we will find some tweaking that will need to be done. If you have suggestions regarding how to post this please send to shelley.koen@mnprairie.org
Hi everyone,
The issue regarding when to issue a 1099 for volunteer transportation just came up again. I looked back at an email that Jena had sent, that sounded like we only 1099'd when it was above and beyond the Federal Reimbursement Rate. Now, per guidance below, it sounds like we should 1099 everything and it is up to the volunteer to sort out.
Thoughts? What are you guys doing?
Good afternoon,
Kathy Ryan to Kristen Houle
I am writing for clarification. For years and years, I have issued 1099's to our volunteer drivers for No Load miles and for the additional per diem we pay above and beyond the federal reimbursement rate. (i.e. 53.5 cents). Per the information below - it almost sounds like volunteer drivers should be getting a 1099 for all payments made to them and then they would need to sort out what is reportable income and what is not. My counterpart in Todd had asked the same question to one of your co-workers and the response was to 1099 only the amount above the IRS reimbursement rate. Can you please clarify what we should be doing? Thanks.
Hi Kathy –
As far as the question below, I would suggest using the Department of Revenue guidance since it is very clear. I’m guessing it was Jenna in Todd that asked the question. I remember she asked my coworker Sarah and she consulted one of the tax individuals in the office. My guess is he didn’t have the below specific guidance at that time. Could you share this guidance with Jenna as well?
Thanks,
Kristen
 |
Kristen A. Houle, CPA, Director
State and Local Government, CliftonLarsonAllen LLP |
Direct 320-203-5539, Mobile 320-250-3114
kristen.houle@CLAconnect.com | |
Main 320-203-5500 x15539, Fax 320-253-7696
818 Second Street South, Suite 320, Waite Park, MN 56387 CLAconnect.com | |
5 comments:
You should report all reimbursement dollars on a 1099 and leave it up to the volunteer driver how they wish to proceed.
Reason being: if you are deducting 14 cents/mile on your end for reported income on the 1099 and the driver decides to reduce the income by actual expenses they incurred on their tax return, they would be doubling up on the allowed deductions for that income.
According to the IRS: a volunteer driver is allowed to either deduct the standard charatible mileage rate of 14 cents per mile OR actual costs. NOT BOTH!! And, it is not our decision to make on which deduction they choose.
June 20, 2017 at 8:48 AM
Hello
I'm wondering if a volunteer driver for medical transportation is considered as "charitable". Do we need to define charitable organization?
Lisa
June 20, 2017 at 9:31 AM
The MN DHS Provider Manual here: http://www.dhs.state.mn.us/main/idcplg?IdcService=GET_DYNAMIC_CONVERSION&RevisionSelectionMethod=LatestReleased&dDocName=dhs16_141019#cs
references the following:
Refer the volunteer driver or volunteer driver organization to the Minnesota Department of Revenue’s website and their Volunteer Mileage Reimbursement page for information related to volunteer driver reimbursement, possible tax implications and requirements for issuing Form 1099.
When you click on the link given it brings you to this page:http://www.revenue.state.mn.us/individuals/individ_income/Pages/VolunteerMileageReimbursement.aspx
Here it states:
"If you are a volunteer driver you receive mileage reimbursement for charitable activities, you must include the payments on your income tax return."
The site references charitable "activities" as being taxable. It does not mention that it has to be for a charitable "organization".
In the Willmar paper an article came out about this topic that you may be interested in reading: http://www.wctrib.com/news/local/4285275-tax-change-could-have-big-impact-volunteer-driver-programs
June 20, 2017 at 1:46 PM
https://www.irs.gov/pub/irs-pdf/p526.pdf
Charitable contributions are defined for the most part as money or property that you donate.
I've provided the link to IRS publication 526.
I interpret the volunteer mileage deduction as one that an individual can use for organizations considered charitable such as 501C 3. I don't think counties are 501C 3.
lstadler@co.rice.mn.us
Governments themselves cannot be 501C 3 like you said.
However, in the same publication you referenced, it says on page 2:
Organizations That Qualify To Receive Deductible Contributions
5. The United States or any state, the District
of Columbia, a U.S. possession (including
Puerto Rico), a political subdivision of a
state or U.S. possession, or an Indian
tribal government or any of its subdivisions
that perform substantial government functions.
(Your contribution to this type of organization
is deductible only if it is to be
used solely for public purposes.)
I interpret this to mean that the volunteer mileage deduction can be used by the individual.
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