The AICPA CPA Letter Daily reported that companies that receive payments from credit cards or third-party settlement agencies may have to keep an eye out for 1099-K forms this year. These forms will be sent to businesses that receive more than $20,000 in gross payments from at least 200 transactions annually. Companies that receive both a 1099-K and a 1099-MISC should make sure their income wasn’t reported twice.
That’s great advice, but how does that apply to churches? Under this new reporting under the tax code, it is likely that churches who receive donations via credit card will receive a 1099-K from their merchant. However, as a tax-exempt organization (automatic for religious institutions), there is no further reporting requirement for churches. Nonprofits who file a 990 and taxable entities will report the information from 1099-K on their respective tax return, but this new regulation doesn’t change the fact that churches are exempt from filing a 990.
Thankfully, this new requirement will have very little impact on churches. But the tax laws change frequently, so it pays to stay informed. Subscribe to our updates by entering your email address in the box to the left so you don’t miss a thing!
Have other church tax questions? Add your comment below.
-Bryan Baughman, CPA, Church and Ministry Principal at PSK, LLP