I hear that bartering is taxable by the IRS. Do I need to report my timebank exchanges?

Timebank exchanges are not bartering so they are not taxable. Here’s why: Bartering is a way of exchanging goods and services based on their market value: Ned is a hairstylist who charges $75 for a haircut and color, which usually takes about an hour. He offers that service to Sylvia in exchange for yardwork. If Sylvia did yardwork for pay, she could earn $25/hour. Therefore, she will do three hours of yardwork for Ned in order to “pay” for her one-hour haircut. Both Ned and Sylvia have earned $75 in this exchange though they have accepted an alternative form of payment. The IRS expects them to pay taxes on their earnings, no matter what the form of payment.

Timebanking, on the other hand, is a way of exchanging services based on the time it takes to perform those services. An hour of sewing is worth an hour of accounting, no more, no less. An hour of your time is worth an hour of my time, no matter what the service, no matter what our backgrounds. When all hours are equal, there is no market value and no tax. What’s more, valuing our time equally can lead to valuing each other equally!

Money need not be attached to time – though some (not all) timebanks do use the language of money: You “earn” a one-hour credit – or a Time Dollar – and it sits in your Time “Bank Account” until you “spend” it. Using the familiar language of money is a way to help people understand how timebanking works if they are not familiar with it. But no, time is not money. And timebank exchanges are not just about services like haircuts and yardwork or any other of the infinite possibilities. Some would even say that timebank services (though certainly valuable) are not even the reason many of us join – or stay – in a timebank. The greatest benefit may be membership in a community of “support, strength, and trust.” So how can time exchanges be subject to income tax when the “income” is connection?