Our church occasionally receives “love offerings” to “bless” our pastor. We often do this at Christmas by raising a love offering and at one or two other times during the year. We do not include these love offerings on the pastor’s Form W-2 at year end. Are we doing this properly?
No. The implication of your question is that you have only one pastor and church attendees understand that the proceeds of the love offering will go to the pastor. When the donor knows that a gift will go to a specific person, tax law generally treats the gift as if it was made to the specific person, and it is not deductible as a charitable contribution. The payment of the love offering is taxable.
Dan Busby is a certified public accountant, president of the Evangelical Council for Financial Accountability (ECFA), and the author of the Zondervan Clergy Tax & Financial Guide.