Skip to main content

Donations to Special Speakers and Honorariums to Non-Citizens

Question 1:

Can donations made by an individual to a special speaker hosted by the church be included in that individual's statement of donations?

Answer 1:

Since the church is acting corporately as the entity engaging the services of the guest speaker and compensating him accordingly, the donations will be tax deductible for the individual donors, and thus may be included in the individual donor’s giving statement. This is not considered a situation in which one individual is simply giving a personal gift to another--a non-deductible activity.

Question 2:

How should a church report a honorarium to a special speaker who does not have a Social Security number (a non-U.S. resident), since the church cannot give the special speaker a Form 1099-MISC?

Answer 2:

This is a very difficult issue for a local church to deal with. It is safe to say that compensating individuals who do not have a legal right to work in the U.S. must be avoided. 

Churches that host special speakers from foreign mission fields may be wise to defer to the mission agency sponsoring such guest speakers therefore, any support raised may best be distributed to the mission agency, instead of the speaker, for its handling.

If a foreign individual accompanies a U.S. missionary to a local church, it may be best to compensate the missionary instead of his or her guest. This assumes that the missionary is predominantly the one supported by the church to represent it on in a foreign country and that the guest is simply accompanying the missionary to better "tell the story."

Comments

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 …