Yes, a student pastor may be reimbursed for travel to and from school. However, it is up to the church to choose whether or not the student pastor is reimbursed. If the church chooses to reimburse the student pastor, it must consider a few points:
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1. Is their employment considered regular?
2. Is the student pastor’s attendance considered temporary?
Since in most cases they are considered regularly employed when under a student pastor appointment, the reimbursement of their travel from the church to school is excludable from their taxable income. If they go to school on a temporary basis, they can exclude the reimbursement received for returning from school to home as well. They are in school on a temporary basis if their attendance at school is realistically expected to last one year or less and does, indeed, last one year or less; or they initially believed that their attendance at school would last one year or less, but at a later date their attendance is reasonably expected to last more than one year (their attendance is temporary up to the date they determine it will last more than one year). If they are in either situation, their attendance is not temporary if facts (i.e., their degree program is known to last more than one year) and circumstances indicate otherwise.
If they are regularly employed and go directly from home to school on a temporary basis, they can exclude reimbursement for the round-trip costs of transportation between their home and school. This is true regardless of the location of the school, the distance traveled, or whether you attend school on non-work days.
So, as an example, the pastor attends classes twice a week for 15 months. Since their attendance in school is not considered temporary, they cannot exclude any reimbursement of their transportation expenses in going between home and school. However, if they go directly from the church to school, they can exclude the one-way transportation expenses of going from work to school. If they go from the church to home to school and returns home, their excluded reimbursement cannot be more than if they had gone directly from the church to school.
If the church chooses to reimburse any mileage expenses for school, it is best that it is only for what the IRS considers deductible educational expenses as described above. Meaning, if they were to receive no reimbursement for their travel to and from school at all, the student pastor would then be able to deduct, on their income tax return, those expenses that the IRS considers qualified education expenses. That methodology alleviates the church from having to figure out how much needs to go in box 1 versus how much does not. Churches typically will do that – reimburse only expenses considered deductible – to alleviate any administrative burdens.