February 19, 2013

Form 1099-MISC Erroneously Issued for Benevolent Gift


A church issued a Form 1099-Misc for a $5,000 gift given to an individual that suffered a life threatening accident to help her with therapy costs. Is this correct? Should this gift be taxable at a regular rate?


Form 1099-MISC is used to report compensation to individuals not under the employ of the issuing organization. If no services are or will be required for the $5,000 benevolence gift listed in the question above, then this amount should not be reported on Form 1099-MISC and will not be reported as taxable income by the recipient. According to IRS Publication 525, gifts to individuals not in the employ of the donor are non-taxable. A corrected Form 1099-MISC should be prepared immediately.

For more blog posts on benevolent gifts, readers should follow the links provided below:

Form 1099-MISC for Benevolent Gifts?

Benevolent Gift Rules Review

Benevolence NOT Reportable on Form 1099-MISC

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