Churches sometimes collect “love offerings” from the congregation for a pastor to honor and bless the individual for their service to the church. When the collected funds are given to the pastor, they must be reported as taxable income. If the recipient is an employee, the love offering should be added to his or her W-2. If the recipient is not a church employee, the income should be report on a Form 1099-MISC if $600 or more was paid out. The IRS has rejected arguments that love offerings are actually non-taxable gifts, and tax courts have affirmed that love offerings are taxable income to the recipient.
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