Pastor's Appreciation Gift

by Yvonne Conrad
(Lyndhurst, Ohio, USA)

Each year our church budgets about $950 to plan and put on Pastor Appreciation Day (PAD). In recent years any un-used funds is given to Pastor either in the form of cash or a gift; i.e. laptop, hotel accomodations, etc. For some members of the Pastoral Relations Committee, it's become more about how much of the budgeted dollars we can use to gift Pastor, than it is about putting on this one-day event to really honor him. There's discrepancy in thought among the committee members as to what is desired versus what is allowable and remain within IRS' guidelines.

I happen to wear two hats; I serve on the Pastoral Relations committee and I am also the church's treasurer. And as such want to do right by God, the Church and Pastor.

My question is probably two-pronged:

Can a portion of funds budgeted to host PAD be used to buy our Pastor a gift or be given as cash?

If so, what are IRS rules regarding reporting, both from the church's perspective as well as pastor's?

I would really appreciate it if you can answer my questions by also directing me to a website substantiating your answers. This can then become a permanent part of our process.

Thank you kindly, in advance.

ANSWER: The best answer I can give about these pastor taxes issues is to refer you to the standard minister's tax manual. You can get information about it here.