Clergy

For purposes of U.S. tax law, churches are considered to be public charities, also known as Section 501(c)(3) organizations. As such, they are generally exempt from federal, state, and local income and property taxes. “Exempt” means they don’t have to pay these taxes. This is so even though...

26 September, 2019

The Internal Revenue Code provides an automatic federal tax exemption for churches. Some churches choose to file for formal recognition of tax-exempt status and some do not. The following questions may help a church to decide whether to file for tax-exempt status: • How large is the church expected to...

19 September, 2019

The Internal Revenue Code section 508(c) sets out that churches are automatically recognized as tax-exempt under 501(c)(3), and the IRS does not require churches to apply for tax-exempt status if they meet the following criteria: a distinct legal existence; a recognized creed and form of...

12 September, 2019

Clergy couples are limited to the equivalent of one housing allowance between the two incomes, providing they live in the same location. In this instance, clergy need to be mindful of the amount requested by each spouse in the annual housing allowance resolution. Generally, any expense to provide...

05 September, 2019

Some states exempt parsonages from property taxes which can either be homes owned by churches and occupied by clergy who serve a local church. California   California property tax laws provide for three exemptions that may be claimed on church property: • The Church Exemption, for property that is...

29 August, 2019

A Qualified Small Employer Health Reimbursement Arrangement (QSEHRA) allows small churches who do not offer group health insurance to their employees to provide money to employees on a tax-free basis; the money can be used to pay for individual health insurance policies and to reimburse...

15 August, 2019

The Housing Allowance is one of the best tax benefits available to members of the Clergy, but also one of the most misunderstood. Here are five common misconceptions about the Clergy Housing Allowance. 1. I can only change my designation once a year.   False. There is no...

08 August, 2019

Social Security taxes or contributions are collected under the Federal Insurance Contributions Act (FICA) and the Self-Employment Contributions Act (SECA). Many people refer to contributions to Social Security as either FICA or SECA taxes. While FICA and SECA may sound similar, they are just two different ways for the government...

18 July, 2019

The Economic Mobility Act of 2019 would repeal section 512(a)(7), which imposes a 21 percent tax on expenses incurred by tax-exempt organizations for providing transportation benefits to their employees. The bill was approved by the House Ways and Means Committee on June 20. While there...

11 July, 2019