Skip to main content

Form 1099-MISC for Missionaries Supported by Local Churches

By
Question:

 Does a church need to issue Forms 1099-MISC to all the missionaries it supports?

 Answer:

 Missionary support will not require issuance of Form 1099-MISC when the support is sent to his or her mission agency. That agency is considered the employer of the missionary and will issue the proper forms. Only when the church acts as a missionary's agency, sending payments directly to the individual, will the church need to issue an information return and then only when the annual payments exceed $600. The church should request Form W-9 be completed by the missionary in these rare (my experience) occasions. Form W-9 is available on the IRS website.
Labels:

Comments

  1. JamesNovember 7, 2010 at 6:12 PM

    In that instance, when a church acts as an agency, should the missionary be considered a W2 or a 1099 employee?

    In our case, 100% of the support is coming from individuals who send the support to our church, who then send it on to the missionary.

    ReplyDelete
  2. Corey PfaffeNovember 7, 2010 at 8:18 PM

    The church should classify the missionary using standards provided by the IRS. IRS Summertime Tax Tip 2010-20 can be helpful in this determination (link below). http://www.irs.gov/newsroom/article/0,,id=173423,00.html

    Ultimately, it's often most beneficial for the missionary to be treated as an employee, and adopting benefits employees are eligible for (as discussed in many of this Blog's entries). It's generally more work for the church to facilitate. I'm guessing that some churches take the "easy" route and simply issue Form 1099-MISC.

    ReplyDelete

Post a Comment

Popular posts from this blog

Rental of a Church Parsonage to a Non-Minister

By
Question: A church owns a parsonage, but the pastor does not use it as he owns his own home. The church rents the parsonage to a tenant other than a minister or employee of the church. Will the church be responsible for paying income tax on these monies as Unrelated Business Income (filing a Form 990-T) even if the money is used to carry on the business of the church? Answer: Whether the money is used for church purposes is irrelevant.  IRS Publication 598  states: "If an exempt organization regularly carries on a trade or business not substantially related to its exempt purpose, except that it provides funds to carry out that purpose, the organization is subject to tax on its income from that unrelated trade or business." Fortunately, in the case of rental income from real property, such income is "excluded in computing unrelated business taxable income" (Publication 598). Caution: see content below regarding debt-financed property.  However, a second concern not a...
Post a Comment
Read more

Review: Form 1099 Payments to 501(c)(3) Organizations

By Anonymous
Question: A church rented space from another church last year. Should it request a completed Form W-9 and issue Form 1099-MISC? Answer: Payments from one 501(c)(3) organization to another 501(c)(3) organization are not subject to Form 1099-MISC reporting. The IRS Instructions for Form 1099-MISC state that "payments to a tax-exempt organization" are exempt from reporting a Form 1099-MISC.  The following are typical examples of payments of $600 or more by a church which are subject to reporting a Form 1099-MISC: Rent paid to an individual (non-corporation) Payments for services rendered by individuals who are not employees (e.g. janitorial service, facilities, snow removal, guest speakers) Support sent directly to missionaries
2 comments
Read more

Housing Allowance and Form 1099-MISC Reporting

By
Question: A church provides its minister a housing allowance but believes it must report the full amount of compensation (including the non-taxable housing allowance portion) on Form 1099-MISC in order to demonstrate the full earnings of the minister. (Starting in 2020, Form 1099-MISC is replaced with Form 1099-NEC for non-employee compensation.) If the church reports his compensation, including the housing allowance, on the Form 1099-NEC as taxable income, will he be able to deduct his housing expenses somewhere else on the Form 1040? Answer: This question brings up a couple of issues. First, most ministers are properly classified as employees who receive Form W-2 , not as independent contractors who receive Form 1099-NEC . Box 1 on Form W-2 reports taxable compensation. It is reduced to reflect the church's designation of a portion of his pay as non-taxable housing. Then, in Box 14 (Other), Form W-2 typically reports as a memorandum item his additional non-taxable, housing allowa...
Read more