January 21, 2010

Form 1099-MISC for Missionaries Supported by Local Churches

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.

2 comments:

James said...

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.

Corey Pfaffe said...

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.