Small church guidelines for gifts to pastor

How should a small church (tithes and offerings less than $75000 annually) handle and report monetary gifts to its pastor and immediate family?

The pastor is a non-employee but he receives a monthly household allowance.

Comments for Small church guidelines for gifts to pastor

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Nov 19, 2019
Taxable Income
by: Vickey

First of all, I would be concerned about classifying a Pastor as a non employee.

A Pastor is usually classified as an employee of the church for income tax purposes and self-employed for Social Security.

With that special dual status, their compensation is usually reported on a W-2 not a 1099.

However, no matter how you classify them, love offerings (gifts) are considered taxable compensation by the IRS.

You would NOT report the housing allowance on a 1099, but you would report the "gifts" given to the Pastor from the church.

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