Ifan individual is given money (more than $600) by a church as benevolence is heor she required to file Form 1099?
Answer:
Form1099-MISC is used to report Miscellaneous Income for each person to whom abusiness or charitable organization paid during the year at least $600 in rents,services, prizes and awards, and other income payments. A recipient does not file Form 1099.
Form1099-MISC should only be prepared when payments are made in the course of a tradeor business. Businessdictionary.com defines “course of business” as the dailyor regular routine peculiar to a firm or trade, involving purchase, production,and sale of usual goods and/or services, and payment and receipt of money.Benevolence is defined as an act of kindness or generosity. When benevolence isgiven to meet the needs of individuals, it is considered a charitable programof the church, is not taxable, and does not need to be reported on a Form 1099-MISC.
Ifthe benevolence is in return for services, it is taxable and needs to bereported on a Form 1099-MISC. Benevolence paid to employees is not taxable aslong as it is not being used to disguise compensation. One-time gifts used tomeet emergency financial needs of employees would generally qualify asbenevolence and not be taxable (just as they would for members of the church orcommunity who demonstrated emergency need).
The members of my FederalTaxation I class at Maranatha Baptist Bible College in Watertown, Wisconsinhave taken on the challenge of study and research to answer posted questions. JamesJorgensen of Owatonna, Minnesota gets credit for this one.
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