Volunteer Driver Tax Bill Ties Charitable Mileage Deduction to Business Rate, Ending 14-Cent Cap Lag

When you use your own car to do good—driving seniors to appointments, delivering meals, or shuttling supplies for your kid’s sports league—the IRS lets you deduct the mileage. But that deduction, set at a measly 14 cents per mile for charitable work, has felt like a slap in the face compared to the much higher business deduction rate. The Volunteer Driver Tax Appreciation Act of 2025 is finally fixing that.

The End of the 14-Cent Treadmill

Right now, the charitable mileage rate is capped by law at 14 cents per mile, a number that hasn’t kept pace with the actual cost of gas, insurance, and maintenance for decades. This bill doesn't scrap the 14-cent baseline entirely, but it adds a crucial new rule for specific charitable transportation activities. Under Section 2, the Secretary of the Treasury is now required to set a new rate for these activities that must be at least equal to the standard business mileage rate used for general business expenses (under sections 162 and 212 of the tax code).

What does that mean in real terms? If the business deduction rate is, say, 67 cents per mile (as it was recently), then the minimum rate you can claim for driving for your charity must also be 67 cents per mile. This change is a big deal for volunteers who itemize their deductions, as it finally recognizes that the wear-and-tear on your vehicle while delivering food bank donations is the same as the wear-and-tear incurred driving to a business meeting.

Who Benefits from the Upgrade?

This is a direct win for anyone who spends serious time behind the wheel volunteering. Think about the parent who drives the debate team to state competitions every weekend, or the retired nurse who drives cancer patients to chemotherapy appointments. Under the old rules, they were subsidizing their volunteer work heavily because the deduction didn't cover their costs. Now, their dedication is better recognized in their tax filings.

This automatic link to the business rate also means the charitable deduction will adjust upward whenever the IRS raises the business rate due to rising fuel or maintenance costs. No more waiting years for Congress to pass a new law just to move the needle a few cents. The system is now designed to keep pace with reality, which is a major benefit for groups that rely heavily on volunteer drivers. The bill specifies that taxpayers can start using this higher calculation method for tax years beginning after December 31, 2024.

Implementation and the Treasury's Role

While the goal is clear—match the business rate—the bill does delegate the specifics to the Secretary of the Treasury to set the rate. This introduces a slight administrative element, but the mandate is firm: the rate must be at least the business rate. The main practical challenge here is simply the potential cost to the federal government. Every time a deduction rate goes up, it means less tax revenue collected, but in this case, it’s a trade-off that directly supports public service and volunteerism.