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Q&A: Do 1099 forms need to be issued to people receiving charitable funds?

The benevolence distributions to a particular individual must represent a legitimate charitable distribution.

My church's benevolence committee has assisted a family for several years who has suffered great loss and financial hardship. Some new members recently joined the committee and say 1099 forms should have been issued for each year the family received financial assistance. Are they correct?

Does the church need to give the recipient of benevolence distributions a Form 1099-MISC (if the distributions are $600 or more in any one year)? Ordinarily the answer would be no, since the Form 1099-MISC is issued only to nonemployees who receive compensation of $600 or more from the church during the year. IRS Letter Rulings 9314014, 200113031.

To the extent that benevolence distributions to a particular individual represent a legitimate charitable distribution by the church (consistent with its exempt purposes), no Form 1099-MISC would be required. It would be unrealistic to characterize such distributions as compensation for services rendered when the individual performed no services whatsoever for the church.

Adapted from the Church & Clergy Tax Guide.

Richard R. Hammar is an attorney, CPA and author specializing in legal and tax issues for churches and clergy.

This content is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. "From a Declaration of Principles jointly adopted by a Committee of the American Bar Association and a Committee of Publishers and Associations." Due to the nature of the U.S. legal system, laws and regulations constantly change. The editors encourage readers to carefully search the site for all content related to the topic of interest and consult qualified local counsel to verify the status of specific statutes, laws, regulations, and precedential court holdings.

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  • May 22, 2017

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