Church Tag

The IRS guidelines on designating a housing allowance for clergy are detailed and specific. Here is a comprehensive overview: Designation of Housing Allowance Advance Designation Requirement: The housing allowance must be officially designated in advance of payment by the employing church or other qualified organization....

Back in April 2024, the US Department of Labor published a rule requiring all employers (including churches) to increase the minimum salary threshold for exempt workers in both July 2024 and January 2025, with regularly scheduled increases after that. However, in mid-November 2024, after the first increase...

To set up a Qualified Charitable Distribution (QCD) from your IRA to a qualifying charity, follow these detailed steps and ensure you meet all IRS guidelines, limitations, and restrictions: Steps to Set Up a QCD Verify Eligibility: Age Requirement: Ensure you are at least 70½...

Ministry dues can qualify as a professional expense under the Internal Revenue Code if they meet certain criteria. According to the Internal Revenue Code and relevant regulations and rulings, the deductibility of such expenses depends on whether they are considered ordinary and necessary business expenses. ...

When your board declares your annual clergy housing allowance, they must declare a specific dollar amount or percent as the housing allowance. The designation must be made in advance of the payment. A general declaration that you have a housing allowance without naming a specific...

There is an appeal process for being denied the 4361 minister exemption. If a minister, member of a religious order, or Christian Science practitioner is denied the exemption from self-employment tax under section 1402(e), they have the right to an administrative review and appeal process. Initial...

Most churches will issue a Form W-2 to a minister for their compensation if the minister is considered an employee of the church. The determination of whether a minister is an employee or an independent contractor is crucial in deciding whether to issue Form W-2...

Question:  Our minister would like to increase his housing allowance due to higher expenses than expected. Can our board amend it? Answer:   Yes, your church can amend the housing allowance, but you must pay attention to the following rules: Proper authorization: The amended housing allowance...

Question:  Can we cut a performance improvement plan short if the employee's performance has gotten worse? Answer:  In general, yes. When an employee is on a performance improvement plan (PIP) and their performance has not improved but gotten worse, it is perfectly reasonable to...

Clergy are subject to self-employment tax because their earnings from ministerial services are considered self-employment income under the Self-Employment Contributions Act (SECA). This classification is based on several key provisions and interpretations of the Internal Revenue Code and related regulations. Definition of Net Earnings from...