As with its employees the church should maintain an accurate and current record of its volunteers. First and foremost please understand that an employee cannot volunteer their time to their employer, and once a volunteer becomes an employee, for income tax purposes, they cannot go back to being an uncompensated volunteer without first officially resigning their employment position. The church is allowed to bless their volunteers, as long as the total value of the gift(s) does not exceed $100.00 during the tax year. If the church gives a volunteer more than $100.00 during the year, then that volunteer becomes an employee and Medicare and Social Security taxes (FICA) must be withheld and a Form W-2 must be issued at the end of the year.