Tax change could have big impact on volunteer driver programs
WILLMAR—Volunteer driver programs, a lifeline for rural residents who rely on volunteers to get them to non-emergency medical appointments out of town, may be facing an uncertain future.
Transit systems were notified in April that volunteers providing non-emergency medical transportation can no longer exclude all of their mileage reimbursement from their income, a move that could force many of them to quit because of the tax consequences.
In the weeks since the news was sent out by the Minnesota Department of Human Services, Tiffany Collins has had plenty of time to wonder and worry about what the implications will be.
"We are very concerned," said Collins, director of Central Community Transit.
She and other transit directors across the state are still researching the reimbursement change.
There's much that isn't clear yet, Collins told the CCT joint powers board in a report Friday on the situation.
"Everybody's interpreting this differently," she said.
What the transit directors do know is that the new standard will make it harder to find enough volunteer drivers to meet a key rural transportation need—ensuring that older adults and people with disabilities can make it to non-emergency medical appointments out of town.
For CCT, it's an important and cost-effective service. Collins said the transit system, which serves Kandiyohi, Meeker and Renville counties, has 78 volunteer drivers who help provide non-emergency medical transportation for needs such as doctor appointments, therapy visits, dialysis, cancer treatment and mental health appointments.
They log an average of 910 one-way trips a month to destinations across the state—Rochester, the Twin Cities, St. Cloud, Duluth, Montevideo, Hutchinson, Paynesville.
Their time is volunteered but they receive the standard federal rate for mileage reimbursement, currently 53.5 cents a mile, and they've always been allowed to deduct it from their income at tax time. This exemption now appears to have gone away, leaving the charitable mileage rate of 14 cents as the only deduction they can take. Mileage reimbursement above this amount will apparently be treated as income.
Many of CCT's volunteer drivers are retired or disabled and could be hit hard with the tax consequences, Collins said.
Seven volunteer drivers have already quit and more may follow, she said.
"We are encouraging them at this time to speak to their tax preparer and find out how this individually affects them," she said.
Filling the gap won't be easy, however, especially in light of rural transportation barriers.
"It won't be just CCT. It will be across the state," Collins said.
Bus systems and private providers don't have the capacity to meet all the needs, and popular ride-sharing services such as Lyft or Uber are scarce in rural Minnesota.
Hundreds of trips involving countless hours are at stake.
Some of CCT's drivers are on the road seven days a week, often for an entire day and sometimes driving to, say, Rochester in the morning and St. Cloud in the afternoon, Collins said.
One day last week, a driver left town at 7 a.m. to bring a client to a medical appointment in the Twin Cities and didn't get home until 15 hours later, she said.
"Those are the situations. This is the most recent one," she said. "There are hundreds of stories out there. We know our passengers and what they need and why they need it."
The burden will especially fall on older adults and low-income and disabled individuals, she said.
Collins said she has contacted local state legislators about the situation and also has sent letters to U.S. Sens. Al Franken and Amy Klobuchar. She and other transit directors around the state are collecting data as well to help quantify the impact.
Since the issue involves an IRS requirement, however, lawmakers have a limited ability to change it, she said.
"There is no legislative fix for this," she said. "We're doing everything we can. We'll try to seek more answers. Hopefully some of our data can be transferred to people who can make a difference."