Q&A: Are Love Offerings Taxable?

How to record these gifts of appreciation.

Q: Our church would like to give a love offering of appreciation to key staff members and leaders. If the church collects the offering and distributes it, is the offering taxable income for the staff and leadership team?

A: Yes, and maybe no. Stay with me for a second…

It is not uncommon for churches to collect an offering to show appreciation for staff and leadership throughout the year, especially around the holiday season. Distributed love offerings should be reported as taxable income in most cases.

If the recipient is an employee of the church, a love offering of any amount should be reported as gross income on their W-2 (in box 1) and taxed accordingly. If the recipient is not an employee of the church, and the amount distributed to the recipient is $600 or more, the love offering should be reported as taxable income on a 1099-MISC form (in box 7). In order to get the information needed to properly complete a 1099-MISC, you will need to request the taxpayer’s identification number via a completed W-9.

If the recipient is not an employee and the amount distributed is $599 or less, the income does not need to be reported. The church will need to document this distribution and the recipient’s demographic information (Name, address, phone number, e-mail, etc.) for recordkeeping purposes.

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