Clergy

When the United States began, most pastors lived in church-owned parsonages, and the US carried over the common European practice of not taxing that as income. The basis of the housing exclusion from taxable income is deeply rooted in our nation’s tax history. In 1954, the...

07 March, 2019

Determining the correct social security tax for clergy is often confusing. Clergy pay social security tax under the Self-Employment Contributions Act (SECA), not under the Federal Insurance Contributions Act (FICA). Clergy engaged in the exercise of ministry are always treated as self-employed for social security tax purposes. A congregation should...

28 February, 2019

As part of the Tax Cuts and Jobs Act that went into effect in January 2018, there is a new “parking tax” that applies to nonprofit organizations, including churches. The new regulation creates unrelated business income tax on qualified transportation fringe benefits, including employer-provided parking. Accordingly,...

21 February, 2019

Start saving time and avoid costly errors by automatically calculating total hours worked. Here are five time-saving things your church can do when implementing time sheets or a time clock: Collect employee data faster — There’s nothing more frustrating to a payroll administrator than waiting for, or chasing down, employees...

07 February, 2019

Only Ministers for Tax Purposes are eligible for a housing allowance on their ministerial earnings. Church custodians, secretaries and ministerial staff who are not Ministers for Tax Purposes are not eligible for a housing allowance. A church may call someone a minister, but the IRS may...

31 January, 2019

Generally, any expense to provide or maintain the home can be used to justify the housing exclusion. Regulations do specifically state that expenses for groceries, paper products, personal toiletries, personal clothing, and maid service cannot be used. You may legitimately include the following: Rent, principal...

24 January, 2019

Churches are required to classify each person that is hired as either a secular or clergy employee. This is a very crucial step in the hiring process. Clergy are taxed differently than secular employees and this treatment is mandated by law. It isn’t optional, so...

17 January, 2019

Pastors, Ministers and other Clergy Staff are subject to estimated federal, social security and state tax payments on a quarterly basis. For example, when you receive clergy income in the first quarter of the year, the taxes are due at the end of that quarter. The...

03 January, 2019