Monthly stipend for a pastor

by Nora Santos
(Seattle, WA)

Does the church need to report to IRS the total stipend paid to the pastor. If the pastor is the incorporator and President of a church is he considered self-employed in regards to stipend he receives monthly?

Vickey's Reply

He is considered self employed in regards to the self employment tax.

As far as reporting his income, the method would depend on whether he was considered an employee of the church.

If he is...you would report his income on a W-2.

If not...report on a 1099-MISC.

If he exercises complete control over the church, he may not be considered an employee; however, you should research your local and federal labor laws to make this determination.