Gifts for Volunteers

by Lolli
(NWA)

Need clarification please! Confusion over employee or not?

If we were to give the children's church leader and the choir director (both volunteers who coordinate the service) a $500 check for their time and service... they are now considered an employee?

So, we would withhold taxes and then send a w2 at end of the year? Or if they are considered non-employee, only send a 1099 if over $600.??

Please advise.

Comments for Gifts for Volunteers

Click here to add your own comments

Jan 01, 2020

Volunteer Appreciation Gifts
by: Vickey

You are opening up a huge can of worms here =)

The DOL (Department of Labor) uses the FLSA (Fair Labor Standards Act) to define who could be considered an employee or a volunteer.

Section 553.106(f) of FLSA regulations gives us some guidelines that outline what kind of payments could possibly jeopardize a volunteer's status.

In my article on " Staff Gifts" (go to PAYROLL under "RESOURCES" in my top navigation bar and scroll down to "STAFF GIFTS") under the Volunteer section ... I provide links to that reg and some articles that may help you in your determination of whether those $500 "gifts" could turn your volunteers into employees.

However, "experts" vary on the amount of a gift that could potentially turn your volunteers into employees that would result in you withholding and matching FICA AND following DOL regulations.

Some say "if it walks like a duck and quacks like a duck ... it's probably a duck =) Meaning ... if your "volunteer" fits the description of a employee and you "pay" them "FOR THEIR SERVICES" more than $100 in a calendar year (following IRS Pub 15-A guidelines) ... you should withhold FICA and treat the "gift" as compensation.

BUT many of them cite the "excess of $500" example as the amount that the "Volunteer Protection Act" outlines as losing volunteer status.

I give the link to 2 such articles in my page on "Staff Gifts" mentioned above.

Click here to add your own comments

Join in and write your own page! It's easy to do. How? Simply click here to return to Love Offerings.

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 =)

Share this page:

What’s this?

Facebook

Enjoy this page? Please pay it forward. Here's how...

Would you prefer to share this page with others by linking to it?

Click on the HTML link code below.
Copy and paste it, adding a note of your own, into your blog, a Web page, forums, a blog comment, your Facebook account, or anywhere that someone would find this page valuable.