1099 or W-2? What Churches Need to Know (Especially for Musicians)

Church staffing rarely fits a neat HR box.

Musicians, singers, accompanists, orchestra members, and other creatives often serve part-time, seasonally, or for special services. This flexibility is valuable, but it can also lead to confusion when tax season arrives.

With the recent change to 1099 reporting thresholds, many churches are asking a familiar question: “Do we still need to issue a 1099 for this?”

Here is a summary to bring clarity.

The 1099 Threshold Change—What It Actually Means

Beginning with payments made after December 31, 2025, the filing threshold for Forms 1099-NEC and 1099-MISC will increase from $600 to $2,000, with inflation adjustments starting in 2027.

In practical terms, this means:

• If a properly classified contractor (1099) is paid less than $2,000 total by the church in a calendar year:

• The church does NOT need to issue a 1099

• If that same contractor is paid $2,000 or more:

• A 1099 is required

This change will reduce the number of 1099s churches need to file, especially for:

• Guest musicians

• One-time speakers

• Occasional creatives

• Short-term seasonal help

What this does not mean

This is an area where many churches are uncertain:

A church cannot avoid issuing a W-2 or justify using a 1099 simply because someone is paid under $2,000.

If a role is classified as an employee, it must be paid through a W-2, regardless of the amount.

Classification comes first. Threshold comes second.

Before asking whether a 1099 is needed, churches must first answer:

"Is this person truly a contractor, or are they functioning as an employee?"

The Internal Revenue Service focuses on control and independence, not on ministry context or intent.

Indicators of a role may be W-2:

• The church sets rehearsal times and expectations.

• The person serves regularly (weekly or seasonally)

• They are directed by worship or staff leadership.

• Their role is integrated into ongoing ministry life.

Indicators of a role may be 1099:

• The work is occasional or project-based

• The individual sets their own availability.

• They serve multiple churches or clients.

• They are paid per event or engagement.

Once the classification is clear:

• The $2,000 threshold then determines whether a 1099 must be issued.

  
  

Common Music Ministry Scenarios (With the Threshold Applied)

Guest Musician for a Single Service

• Proper classification: 1099

• Paid $500 for one Sunday

• No 1099 required under the new threshold

Regular Worship Team Vocalist

• Serves weekly under staff direction

• Proper classification: W-2

• Threshold does not apply.

• Must be on payroll regardless of pay amount

Christmas Orchestra Member

• One-time seasonal engagement

• Paid $1,200 total

• 1099 classification OK

• No 1099 filing required

Sound or Media Tech (Weekly Role)

• Scheduled weekly

• Ongoing responsibility

• Likely W-2, even if paid modestly

Why Churches Get Into Trouble Here

Most misclassification issues don’t come from bad intentions. They come from:

• Inconsistent practices

• Verbal agreements

• “That’s how we’ve always done it.”

• Different leaders handle things differently

And when there’s no clarity, the risk grows:

• Back payroll taxes

• Penalties and interest

• Amended filings

• Strained relationships with people serving the church

The new threshold reduces paperwork, but it does not reduce responsibility.

Every Church Needs a Clear Classification Policy

One of the healthiest steps a church can take is to put this policy in writing.

A simple policy should clearly state:

• How the church determines W-2 vs 1099

• Which roles are never treated as contractors

• How seasonal or one-time roles are handled

• What documentation is required before payment

• Who approves exceptions (if any)

This protects:

• The church

• The leadership team

• The people serving in ministry

It also creates consistency, regardless of who is leading worship, managing finances, or processing payments.

How We Help

We regularly help churches:

• Review current contractor and musician arrangements.

• Identify misclassification risk

• Write clear, ministry-appropriate classification policies.

• Align finance, HR, and worship leadership around shared expectations.

If your church would benefit from greater clarity, we can help you put a simple, defensible policy in place that supports ministry without adding unnecessary complexity.

Closing Thought

The question isn’t just “Do we need to file a 1099?”

It’s “Are we stewarding people, systems, and trust well?”

Getting classification right is part of that stewardship, and now is a good time to address it.