Funeral Honorarium given to clergy

I work at my family owned Funeral Home in Illinois. When we have a funeral it is customary for us to give the clergy who is doing the service a check for $100 to $125 as a honorarium.

This is from the Family of the deceased and listed in their bill as a cash advance item so is actually paid by the family. We were told that if a clergy was to receive over $600.00 from our Funeral Home we would have to send him a 1099.

We don't want to cause them to pay any taxes on this gift. Can you tell me if it is correct to send one or since this $600.00 was a accumulation of several different families honorariums no 1099 needed.

Thank You

Comments for Funeral Honorarium given to clergy

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Clergy honorarium in 2023
by: Anonymous

While pastoring a congregation, I gave the church all honoraria received for member funerals and split the amount for non-members, since I drew a salary from the church. Today in retirement, I keep all honoraria. The minimum amount should be $350, which is taxed (self-employed SS, Fed, State, Local) at 30% or more. This nets the officiant less than $250 for at least 5 hours of work (family consultation, preparation, funeral and graveside services). As such, this is perhaps the least expensive cost associated with a funeral. Furthermore, this is an optional cost for those without church affiliations.

Funeral Honorarium
by: Anonymous

It seems to me that if a pastor or priest has a set amount they charge and make set known up front, that makes it more like payment. However,in my experience and opinion, see honorarium is more like a thank you and doesn't necessarily correspond to the expenses incurred. Considering the nature of a priest or ministers services in general, I think it's shameful to suggest they should pay taxes on these gifts of money. Many times people pay what they can. That makes it a gift.

Funeral honorarium reporting
by: D Fry

While the ruling cited does indeed seem to indicate that a funeral home would not be required to report such payments made on behalf of families, it is worth noting that the ruling ends with the following caveat, "This ruling is directed only to the taxpayer(s) requesting it. Section 6110(k)(3) of the Code provides that it may not be used or cited as precedent."

While it may be likely that the IRS would rule similarly in your case, if that exception is not codified, then it doesn't apply to you.

In any event, the minister(s) should be declaring all such payments as income whether or not there is any reporting to the IRS of such income. The law provides as much, and it really is incumbent on ministers to follow the law.

Minister 1099's
by: Anonymous

Look at Rev Ruling PLR200106032. The amounts received by Ministers is not in the control of the funeral home and therefore 1099 reporting is not necessary.

Honorariums and taxes
by: D Fry

Lewis in NC is correct: The IRS requires you to issue a 1099 to anyone to whom you have given honorariums that meet or exceed $600.00 in total. It does not matter that it was from many different families if you are issuing the checks. And it is just and fair that they pay taxes on the money - it is not a GIFT, but payment for services rendered.
You could choose to relieve yourself of this obligation by passing along a check from the family rather than from the funeral home, but the minister would still be required to claim this as income on his income tax return.
Hopefully he would anyway - hard to respect anyone who would lie and cheat on his taxes, especially a minister of the Gospel.

Paying clergy for funerals. . .
by: Lewis in NC

"We don't want to cause them to pay any taxes on this gift?"--Rest assured you are NOT causing the clergy to pay taxes on this gift. The money paid over time to the clergy for his/her services is the pay (not gift) he/she receives for his/her life's work and the IRS code is causing any possible tax liability on it, NOT YOU. If you pay $600 or more per year to one clergy the IRS requires YOU to report it on a 1099 to that person.

One or two can do the right thing in this situation, OR NOT, the choice is there to make.

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