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Are grant funds to the church taxable for the pastor?

Our church was the recipient of a large grant, to be used for my husband's (he is the pastor) sabbatical. While some of these funds will be used within the church for various things (supply pastor, books, church fellowship, etc), a large portion will be used for my husband and his family to travel. Since the full amount of the grant is given to the church, and disbursed to my husband for travel as specified in the grant proposal, does any part of this grant need to be reported as taxable income on our personal tax return? Thank you.

Comments for Are grant funds to the church taxable for the pastor?

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Oct 23, 2012
 Are grant funds to the church taxable for the pastor?
by: Ken

When ever funds are given to the Church and the contributor is given tax credit for giving, anything paid to a Staff Member must be reported on the W2 as income.
Oct 23, 2012
 additional grant funds question...
by: Anonymous


Thank you for your assistance - I really appreciate it. Does it matter that the grant is given by a private foundation, which is 501(c)(3) - tax-exempt? I found this on the IRS website which seems to speak to this - http://www.irs.gov/Charities-&-Non-Profits/Private-Foundations/Certain-private-foundation-grants-to-public-charities-not-treated-as-grants-to-individuals.

We've received different guidance on this from four different sources, so just trying to find out the right info, and do the right thing!

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Join in and write your own page! It's easy to do. How? Simply click here to return to Minister's W-2.

If you want to DIY your payroll, I highly recommend you look at using Gusto! It is very user friendly and their support is awesome! Plus they know how to set up and maintain payrolls for churches and nonprofit organizations.

Note: I am a "partner" of Gusto, but as I have told you before ... I never recommend anything that we or our clients have not tried and love =)



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