What is mileage reimbursement?

Mileage reimbursement is the reimbursement you receive for using a personal vehicle for ministry purposes. The reimbursement covers all costs of owning and driving your vehicle for the qualified miles. The IRS mileage reimbursement covers the use of specific vehicles, namely: cars, vans, pickups, and panel trucks.

Mileage reimbursement is normally calculated on a per-mile basis and covers all expenses of owning and running your vehicle for ministry purposes. When employees regularly use their own vehicles for church activities.

The current, 2023 federal mileage rate:

65.5 cents per mile for ministry purposes
22 cents per mile for medical purposes
14 cents per mile for charitable purposes

Mileage rates 2022

The federal mileage reimbursement rates are applicable from July 1st, 2022 till December 31, 2022

62.5 cents per mile for ministry purposes
22 cents per mile for medical purposes
14 cents per mile for charitable purposes (this rate remains the same)

The official mileage rates from the start of 2022 until June 30th, 2022

58.5 cents per mile for ministry purposes
18 cents per mile for medical purposes
14 cents per mile for charitable purposes

Mileage reimbursement is not considered taxable income under an accountable reimbursement plan. However, if you are reimbursed at a higher rate than the standard IRS rates, any excess is taxed as part of your income. Also, churches can set a monthly fixed amount for the auto allowance or nonaccountable plan which is taxable income.

In order to be reimbursed for your ministry driving, you need to submit a monthly report to the church to support your mileage. Ministers should log the following information:

Total mileage of each trip
The time and purpose of the trip
Your destination
The total mileage for the year

The records you keep must also be timely – recorded at or near the time of the trip.

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Clergy Financial Resources
Tax I Payroll I Bookkeeping I HR
11214 86th Avenue N.
Maple Grove, MN 55369

Tel: (888) 421.0101
Fax: (888) 876.5101

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Clergy Financial Resources serves as a resource for clients to help analyze the complexity of clergy tax law, church payroll & HR issues. Our professionals are committed to helping clients stay informed about tax news, developments and trends in various specialty areas.

This article is intended to provide readers with guidance in tax matters. The article does not constitute, and should not be treated as professional advice regarding the use of any particular tax technique. Every effort has been made to assure the accuracy of the information. Clergy Financial Resources and the author do not assume responsibility for any individual’s reliance upon the information provided in the article. Readers should independently verify all information before applying it to a particular fact situation, and should independently determine the impact of any particular tax planning technique. If you are seeking legal advice, you are encouraged to consult an attorney.

For more information or if you need additional assistance, please use the contact information below.

Clergy Financial Resources
11214 86th Avenue N.
Maple Grove, MN 55369

Tel: (888) 421-0101
Fax: (888) 876-5101
Email: clientservices@clergyfinancial.com