Income Tax for a Minister not Receiving a Salary

by Deloris
(Montgomery, Al )

Minister not receiving a salary, but does receive pastoral support how would you file this on your income taxes?

Pastor started a church the church is unable to support him financially, however he is provided financial support by the members giving him a separate offering each Sunday.

The offering is solicited, offering envelopes are provided which states pastoral support and contributions are given at the members free will.

How would you report this as income or is this acceptable according to IRS.

Comments for Income Tax for a Minister not Receiving a Salary

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Mar 09, 2010

Status of Gifts to Minister
by: Marcus in Texas

Is the money being given by individuals being deposited into the church's bank account and is the minister being given a check written on the church's bank account, OR is the money being given going directly to the minister without going through the church's bank account?

Is the minister considered to be an employee of the church? If no, and if the church is collecting the money and then writing a check to the minister, it seems that a Form 1099 would need to be filed with the IRS and given to the minister at the end of the calendar year.

If money is simply being given to the minister and not going through the church's bank account, the matter is between the minister and the IRS.

Is the minister filing quarterly tax estimate/ payments to the IRS? If those who contribute to the minister are claiming those contributions as charitable tax deductions, then those gifts to the minister are taxable income to him. These are merely my opinions and are not the opinions of a CPA or a tax lawyer.

May 01, 2010

Status of Gifts to Minister
by: John

Actually, if the church takes a collection, whether or not it passes through the books, the IRS genererally tends to view it as taxable income.

Cash gifts are only non-taxable when given 'directly' to the minister by the gift-giver.

Gifts given 'directly' to the minister are 'not' tax-dedutible.

I'm no CPA or lawyer, but I am an IRS-trained tax preparer.

Jun 01, 2010

Minister not receiving salaries but receive pastoral support
by: Dave Llewellyn Dixon

As a CPA, I concur 100% with the previous commentor who indicated that if the money goes through the church's bank account and a check is written to the Pastor, the Pastor gets a Form 1099 at the end of the year and claims this as income on his/her tax return.

If however it is given directly to the Pastor by each individual member, it is considered a gift (the amount an individual can give as a gift is limited each year by the IRS)and not taxable to the Pastor.

The downside to the giver is, it is not deductible on the giver's tax return as a charitable deduction. General tax principle requires that for an item to be deductible by the giver, it must be taxable to the recipient. Therefore, if it is treated as a gift and not taxable to the Pastor, it cannot be deductible to the giver.

Visit my website at: www.dldixoncpa.com or e-mail me at dave.dixon@dldixoncpa.com for personal consultation

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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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