Skip to main content

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.

Comments

  1. 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. 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

Gifts Paid Out of Church Funds: Form 1099-MISC Requirements

Question:
 A church gave a wedding gift of $1000 to a couple who are church members. No goods or services were provided by the couple in exchange for the gift.  Is a Form 1099-MISC required? 
Answer: In the following answer, we assume that the couple are not employees of the church from whom the gift could not be viewed as compensation for their services. Also, the amount seems to be small enough to avoid any concerns of "private inurement."

Accordingly, no Form 1099-MISC is required. According to the 2017 IRS Instructions for Form 1099-MISC a Form 1099-MISC is only required for payment of goods or services. The requirements are as follows:
"File Form 1099-MISC, Miscellaneous Income, for each person to whom you have paid during the year:  At least $10 in royalties (see the instructions for box 2) or broker payments in lieu of dividends or tax-exempt interest (see the instructions for box 8);  At least $600 in:  1. Rents (box 1);  2. Services performed by someone who is not your …

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

Question:

A church rented space from another church last year. Should it request a completed Form W-9 and issue Form 1099-MISC?

Answer:

We have written similar blog posts on this topic in the past (listed below), but we figured it was a good time for a review. 

Payments from one 501(c)(3) organization to another 501(c)(3) organization are not subject to Form 1099-MISC reporting. The 2015 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 missionariesHere are some similar blog posts that we have written in the past:

Form 1099 for Payments to Other Ministries
Form 1099 for Non-profit?
Fo…

Qualified Small Employer HRAs

On December 13, 2016, President Obama signed the 21st Century Cures Act, allowing qualified small employers to offer Health Reimbursement Arrangements (HRA) that follow certain terms.

After the Affordable Care Act was passed, the IRS originally determined that an HRA was not a qualified group health plan. The Cures Act overrules this decision. HRAs are again an option for qualifying small employers.

To be eligible, the small employer must have fewer than 50 employees and must not offer a group health plan to any of its employees.

The Qualified Small Employer Health Reimbursement Arrangement (QSEHRA) must be subject to the following terms.
No salary reduction contributions may be made (i.e., 100% employer-funded).Employer must receive proof of employee’s minimum essential coverage.Reimbursements must be for qualifying medical expenses.Reimbursements for any year cannot exceed $4,950 (or $10,000 for family coverage), which will be adjusted annually for inflation.Employer must offer the …