NOTE: Here are some facts you should know about the tax implications of gifts that your church gives to your pastor or any other Conference/church employee, including those on local payroll. These guidelines apply all year long, but are especially relevant during October (Pastor Appreciation Month) and Christmas.
So, what can you do for your pastor or other employee that is not considered taxable income?
Here are a couple of suggestions.
Give “Consumable Gifts” such as flowers and food, which are not reportable to the IRS. Examples: Fruit, nuts, or any other grocery food item. [Note that this does not include gift cards for food--i.e. restaurants/grocery stores/etc. Gift Cards are reportable.]
If individuals wish to give a group monetary gift to the pastor or other employee, money should be placed in an appreciation card which should be given directly to the employee, without being counted or recorded. Since this money is from individual members, not from the church, the church is not required to report it to the IRS.
NOTE: Since any money handled by the treasurer must, by policy, be deposited into the bank and accounted for, if this option is chosen, it is important to have someone other than the treasurer be responsible for the gift collection.
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The original version of this page was provided to Jewel by the Georgia-Cumberland Conference Audit Team. Created by Linda McCabe.