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Volunteer Drivers

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Mr Rick

What is the name of your state? Michigan

I am a medical transportation company, sole-propriortor, I use what myself and my bookkeeper call "volunteers". They are volunteer drivers using their own vehical with full coverage insurance, we pay them at a rate of .35 cents a mile which we call reimbursement for the wear on their vehicals, my bookkeeper along with an attorney say that this .35 cents per mile is a grey area. Since I only reimburse them at .35 cents per mile for wear and we call them a volunteer I have been calling this non taxable income. ANY ADVICE?



I have to agree with your bookkeeper and attorney, except that I think the area is perhaps more black than grey. The money they receive would be non taxable if it were an employee reimbursement; however, they are not employees. It would also be nontaxable if you were reimbursing them for care expense for a qualified organization (charity), but you are a for-profit business; therefore, I believe the money is taxable to them.

Mr Rick

Dear Luka,

thankyou so much for your advice this is a great way for business such as myself to get advice. If you do not mind I would like to give you a little mire information on our volunteer drivers.

Item # 1: My bookkeeper says that the state \federal lets us use the figure .35 cents per mile as saying they are volunteers.

Item # 2: Michigan State Family Indepentent Agency, uses hundreds of drivers and calls them all volunteers and pays them .32 cents per mile

Item #3: State police, sheriff's department all use many volunteer drivers to transport.

do you believe cause so many agencies do this using volunteers, that my company is doing the same thing, is it still such a grey area??? thanks


Senior Member
The rules are different for State agencies, non-profit organizations, and private businesses. If you can find a private business that gets away with this, have them tell you how they do it. Otherwise, it's taxable income.

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