Anonymous Gift Designated for Church Staff

A member donated $3000, and requested it be given to six different staff members ($500 each).

The donor wished to remain anonymous, and only gave the funds to the church for the purpose of remaining anonymous to the recipients.

The donor does NOT expect nor wish for the $3000 to be credited as a deductible charitable contribution (he regularly also makes unrestricted gifts which are deductible).

If the church forwards this money as desired by the donor, should the $500 payments be considered taxable income to the recipients?

We believe these payments are NOT from church funds, but the church is merely doing a "pass-through" favor for the donor by getting these payments to the desired individuals without revealing the donor. Nor does the donor receive any charitable contribution credit. As such, they should not be added to the employees' W-2's as taxable income.

Comments for Anonymous Gift Designated for Church Staff

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Taxable W-2 Income
by: Vickey

Should the church choose to accept the donation on the terms the donor specified ... it would definitely be taxable income to the recipients and definitely should be processed through the church's payroll and be reported on the employees' W-2s in Box 1.

ANY love offering, bonus, or "cash" gift given to an employee thru the church ... is taxable income.

If the donor does not want it to be taxable income to the staff, they cannot run it thru the church =(

Maybe they can use someone they trust to give the money directly to those staff members and tell them that a member of the church felt led to personally give them a love offering or gift, but wished to remain anonymous.

If you do accept the "pass through" donation, you are correct in that it should not be recorded as a "charitable contribution" or receipted as one as the church does not have "control" of the funds.

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