Church Tag

The answer is “both.” Ministers have what is commonly referred to as “dual tax status.” For federal income tax purposes, a minister is generally treated as a common-law employee. For payments into Social Security, the minister is always self-employed. This is an IRS regulation and...

15 December, 2021

If your church pays musicians to perform during services or other events, you’ll need to determine if they are employees or independent contractors. The biggest distinction between W-2 employees and 1099 workers is the amount of control you have over them. With a W-2 employee, you have...

08 December, 2021

Housing Allowance Resolution Sample  The following is a sample resolution to be adopted by the board of directors of any organization which employs a “minister” as defined by the IRS: Whereas, section 107 of the Internal Revenue Code specifies that the amount of ministers’ compensation that is...

01 December, 2021

While it is true that ministers, and other church employees, may earn less than those performing similar jobs requiring similar skills in the secular world, there are unique tax advantages that can help offset the compensation differences. One of the greatest advantages for church workers...

24 November, 2021

When you manage a nonprofit, spending money is always an issue. After all, your company is funded by grants and donations, many of which have strings attached. It's your obligation to keep the organization lean and the overhead low. However, the bigger an organization gets,...

17 November, 2021

While ministers are employees for federal income tax reporting purposes, they are self-employed for Social Security purposes with respect to services they perform in the exercise of their ministry. This means that they must pay both the employee and the employer share of social security tax...

10 November, 2021

2022 is almost here! December is a great time of year to update your housing allowance for the following year. Here are five quick facts about designating a housing allowance: The housing allowance designation can only be made for the future, not retroactively. This is...

03 November, 2021

A Clergy Staff Member is a person who has been granted ecclesiastical authority by an association, denomination, or state through the rite of ordination, commissioning, or licensing. Generally, an ordained minister has a Master of Divinity from an accredited theological school and is recognized through...

27 October, 2021

The short answer to this question is yes.  Unlike non-clergy employees, clergy do not have Social Security or Medicare taxes taken out of their paycheck. The Church also does not pay any matching portion to IRS, so the Minister has to pay both halves, the...

20 October, 2021

How does a church go about determining the amounts it should pay its ministers and other employees? Church boards, or those to whom they delegate, must determine what amounts to pay each staff position. The experience and competence of those making the decisions vary greatly...

13 October, 2021