January 20, 2008

Individuals Paid for Services Provided to a Church

Any payments by a church to individuals for services rendered to the ministry represent taxable income to the recipients. If an individual is properly classified as an independent contractor (IRS Publication 15-A can help in this determination), then he or she must be issued Form 1099-MISC if his or her annual receipts paid by the church equals or exceeds $600. Each recipient properly classified as an employee must receive a Form W-2 by January 31 of the succeeding year. Church employees other than ministers are generally subject to social security and medicare tax withholding and employer matching; the exceptions to this requirement are rare. Churches are not subject to federal unemployment taxes.

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