The Lilly Endowment Clergy Renewal Program provides an opportunities for pastors to step away briefly from the persistent obligations of daily parish life and to engage in a period of renewal and reflection. This grant is up to $50,000, and all or part of the amount received may be tax-free based on the allocation of these funds:
- Pulpit Supply – Maximum $15,000
- Funds used for pulpit supply are tax-free to the church through the Lilly Endowment or they can be paid by other allocated funds.
- Personal expenses related to renewal program
- Income tax regulations specify that payment of personal expenses for an individual through the renewal program shall be taxable income to the pastor.
- Income tax regulations specify that an employer’s reimbursement of family or nonemployee spouse’s travel expenses through the renewal program shall be taxable income to the pastor.
- Ministry expenses directly related to the church
- Amounts paid or allowed to, or on behalf of, an individual to enable him or her to pursue ministry studies, education or training directly related to the church shall be non-taxable.
- The tax treatment of ministry expenses depends on whether the expenses are reimbursed by the church, and whether any reimbursed expenses are paid under an accountable or a non-accountable reimbursement plan.
Do you have additional questions about Lilly Grants or Sabbaticals? Clergy Financial Resources can help. Visit our website at https://www.clergytaxnet.com/resources/proadvisor/ today to schedule a Pro Advisor meeting.
Clergy Financial Resources serves as a resource for clients to help analyze the complexity of clergy tax law, church payroll & HR issues. Our professionals are committed to helping clients stay informed about tax news, developments and trends in various specialty areas.
This article is intended to provide readers with guidance in tax matters. The article does not constitute, and should not be treated as professional advice regarding the use of any particular tax technique. Every effort has been made to assure the accuracy of the information. Clergy Financial Resources and the author do not assume responsibility for any individual’s reliance upon the information provided in the article. Readers should independently verify all information before applying it to a particular fact situation, and should independently determine the impact of any particular tax planning technique. If you are seeking legal advice, you are encouraged to consult an attorney.
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