Volunteer Treasurers do the best they can – figuring out how to properly set up payroll for clergy and other called workers can be daunting. At Landmark Tax Service we can walk you through the steps on how to handle this. We help make sure you do it right. Whether you do your own payroll or have an outside service – Landmark Tax Service will show you and your payroll provider how to manage your payroll correctly for the church and its employees.
Employer’s Tax Guide
We strongly encourage the following to make sure you are in compliance:
- Use a qualified payroll service
- Reimburse Pastor’s and other Called Workers 50% of the individuals estimated SECA payment. This is how you treat every employee – it is only fair that your Called workers get the same
- Have a qualified accountant audit your books once per year
A typical church or school will have two kinds of workers: the employee, who is treated for income tax purposes similarly to all secular businesses, and the “minister of the Gospel,” for whom the regulations for income, Social Security, and Medicare tax are unique. IRS Publication 517, “Social Security for Members of the Clergy and Religious Workers,” alludes to this uniqueness: “Because of specific legislation, you (minister of the Gospel) are considered a self-employed individual in performing your ministerial services for Social Security purposes. However, because of common-law rules, you may be considered an employee for other tax purposes.” See 7.105 for common-law rules and also IRS Publication 15-A. As the reporting and withholding requirements differ for each set of workers, the treasurer should be well versed in the differences and clearly understand in which category each worker is classified. If you use an outside payroll service, you (congregation and minister) are still responsible. Because of the unique nature of regulations regarding “minister,” please pass this information on to your payroll service.
Status of Congregational Workers
Characteristics of Employees & Self-Employed Individuals
Congregational Workers & Social Security
We welcome any questions or comments you may have. Feel free to contact us at any time:
Office: 516.358.3612 | Fax: 516.358.5656 | Email: firstname.lastname@example.org
Landmark Tax Service – 99 Tulip Avenue, Suite 404 | Floral Park, NY 11001
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