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06/29/2013

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Teresa Hinze

The statement that "Reimbursements for expenses incurred while volunteering are also, surprisingly, considered taxable income." is not entirely correct.

Check with your accountant for specific application to your organization, but generally payments to volunteers or employees based on documented allowable expenditures (accountable plan) would not constitute income. The organization is required to maintain records related to the reimbursement, including any backup documentation.

Tobi

Thank you for the additional information, Teresa.
It's also important for volunteers to check with their own accountants or tax preparers about the possibility of deductible expenses. Volunteer mileage, for example, is deductible, but not at the same rate as mileage for business. Here's a link to info from the IRS on this topics -- http://www.irs.gov/pub/irs-pdf/p526.pdf

David Hacker

you wrote under volunteer stipend, "$500 a year or 20% more than what an employee would be paid" Do you mean, more than 20% of what an employee would be paid?

Lisa

where can I find reference to this quote from a DOL website? According to the Department of Labor, if a volunteer is paid a stipend of over $500 a year or 20% more than what an employee would be paid, they must be treated as paid staff and are subject to the laws that govern employees. - See more at: http://tobijohnson.typepad.com/tobisblog/2013/06/volunteer-stipends.html#sthash.B9liaFVx.dpuf

Tobi Johnson

@Lisa:

Check the US Department of Labor Opinion Letter FLSA2005-51 (http://www.dol.gov/whd/opinion/FLSA/2006/2006_08_07_28_FLSA.pdf) for what constitutes a "nominal fee" in terms of volunteering according the Fair Labor Standards Act.

Some things to keep in mind from DOL (directly from that letter):
-- "[I]n enacting the 1985 FLSA Amendments, Congress sought to ensure that true volunteer activities were neither impeded nor discouraged. Congress was
explicit in its 1985 Amendments that a “volunteer” may receive “no compensation,” but may be paid “expenses, reasonable benefits, or a nominal fee.” 29 U.S.C. § 203(e)(4)(A)

-- "The FLSA permits volunteers to be paid a nominal fee, which we believe is the same as an incidental or insubstantial fee. Since the FLSA does not define “nominal fee,” the Department believes the definition of “incidental” in 29 U.S.C. § 213(c)(6)(G) of the FLSA to be informative here. In that provision, Congress set out a 20-percent test to determine whether something is insubstantial..."

-- "[A] nominal fee is not a substitute for compensation and must not be tied to productivity.”

-- "Any such unreimbursed expenses [travel, etc. paid by volunteer & not reimbursed] will increase the amount of the stipend that may qualify as nominal."

Also, See the Nonprofit Risk Management Center's well-researched article "Employee or Volunteer?"(http://www.nonprofitrisk.org/library/articles/employee_or_volunteer.shtml)

angela

please contact me about your volunteer/peer/internship program at 1520 carroll st apt 2d brooklyn ny 11213 angela rogers

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