Loan Forgiveness for Religious Workers

Under new regulations effective July 1, 2021, clergy and religious workers may now qualify for Public Service Loan Forgiveness (PSLF). According to attorney Adam Minsky writing for Forbes.com, the PSLF program was launched in 2007 as a way to help those working in public service with their student loan debt. Under the program, an individual who meets the…

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How do we pay nonexempt staff for after-hours communications?

Generally, non-exempt employees are paid hourly. We recommend instructing non-exempt employees to track all their time worked and prohibit working off the clock. Employers may use any timekeeping method they choose as long as it’s accurate and capturing all the required information (see below). For example, you may use a time clock, have a timekeeper keep…

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Mid-Year – Housing Allowance Review

Mid-Year Review of Housing Allowance Designations Perhaps the most beneficial tax benefit available to a minister is the clergy housing allowance, which allows a minister to exclude permissible housing expenses from taxable income. Now that that the current year is more than half over, it is a good time for churches and their ministers to…

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Is a Minister’s Outside Income Taxable?

Is a Minister’s Outside Income Taxable? When a minister’s income is reported on a year-end W2 or 1099, it is straightforward that the income is taxable and must be reported as such. However, it may be less clear to a minister if other forms of income should be reported as taxable. A minister may receive…

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Reporting ministry expenses and/or declare a housing allowance for interim positions

How should I report ministry expenses and/or declare a housing allowance for interim positions. This situation presents unique issues, especially for retirees who are receiving a pension. The differences in tax treatment depend on the length of the interim position, and taxpayers are advised to consider them carefully: Interim position of one year or less…

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Three key tax provisions that apply to clergy

The three main key tax provisions that apply to clergy: Self-employment tax Clergy are not eligible to have FICA taxes withheld from their church compensation. In lieu of FICA taxes, clergy pay self-employment tax, also known as Self-Employment Contributions Act tax (SECA). Reimbursements from an employer of SECA are taxable as wages. However, even though…

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Does My Church Need an Employee Handbook?

In general, having an employee handbook or policy manual is a good business practice, but specifically, there are some good reasons, from a legal standpoint, to create an employee handbook. The Purpose of an Employee Handbook Employees like to know what is expected of them and they want to know that they are being treated…

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Repay Employee Student Loans up to $5,250 tax-free

Many churches want to assist employees in the challenges that come with the COVID-19 pandemic. Now, the CARES Act provides a temporary opportunity to help repay employee student loans. The Coronavirus Aid Relief and Economic Security Act (the “CARES Act”) provides a way for churches to help repay employee student loans, with tax benefits for the employee….

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How Do Churches Navigate Commercial Lease Agreements?

How Do Churches Navigate Commercial Lease Agreements? Though many established churches are long-time building owners, there are many newer churches or churches that have outgrown older facilities, which find themselves entering into commercial lease agreements. Just like the documents involved in purchasing a new residence or a new car, the commercial lease agreement may be…

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IRS Releases 2021 Fringe Benefits Guide

The IRS updated Publication 15-B for 2021, the Employer’s Tax Guide to Fringe Benefits. This publication provides an overview of the taxation and exclusion rules applicable to employee benefits such as accident and health benefits, dependent care assistance, providing a car,  cell phone,  health savings accounts, group term life insurance coverage, etc. In general, fringe…

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