How much revenue can a congregation receive that is not cash donations (receipted), such as rent or interest?
All expenditures that the church makes must be for charitable activities and tie back to the purpose in the articles of incorporation or the church’s mission as described in Section C of the T3010. If this is the case then it is allowable to have rental or interest income. Please make sure the church is using that rental or interest income for charitable activity and that it is clearly documented in the church’s financial statements and/or minutes and/or policies.
Does payment to an organist (or similar positions) require reporting on a T4 or a T4A?
This is a question of whether the organist is an employee needing a T4 or whether the organist is providing a ‘fee for service’ requiring a T4A.
The congregation may need to apply some judgement to determine a ‘reasonable’ perspective. For instance if the services are very casual i.e. now and then and the total payments are under $1,000 then this looks more like fees for services. If the activity is regularly scheduled on the majority of Sundays and the total payments in the year start to climb higher than $1,000 then it appears that the person is an employee and a T4 should be issued.
Also note: CRA had been reviewing their definition of ‘fee for service’ and had stated that penalties would not be levied for failing to complete a box 048 fee for service on the T4A. This however does not mean that a T4A should not be issued at all. It means that the T4A should be continued to be issued with box 028 other income completed for this amount, if there is uncertainty between the two boxes.
Traditionally our congregation has collected cash from parishioners for a Christmas gift for the pastor. Is this a gift between individuals or does this constitute a taxable bonus?
Although it could be viewed as a gift of after tax money by a group of individuals to the pastor, completely separate and apart from the church (i.e. the employer), paragraph 6(1)(a) of the Income Tax Act is very broad in terms of what benefits should be included in employment income. Paraphrasing the actual legislation, it generally requires that the value of benefits of any kind whatever received or enjoyed in the year in respect of, in the course of, or by virtue of an individual’s employment must be included in the individual’s income.
It appears, therefore, that CRA’s view would be that the amount of the gift should be included in the pastor’s income.
Where there is no parsonage in a rural community and the Pastor chooses to live in a neighbouring community, who is responsible for travel expenses (Pastor or congregation) for travel to the office in the church or to the church for worship services?
to a second congregations in the Parish, for regular council, bible study or worship services etc?
- Typical everyday travel to and from your place of work is a cost to the employee.
- Tax free mileage is paid when the employee is expected to travel from the workplace to an outside meeting or event.
Consider choosing the location where the majority of the responsibilities are as the ‘official’ work place and travel from there to the second location work be work paid travel.