Small Church-Filing Requirements

[zeros]

A small church with no payroll is inquiring about whether they are required to file a non-profit tax return. Anybody have any info on this?

[ChEAr$]

A small church with no payroll is inquiring about whether they are required to file a non-profit tax return. Anybody have any info on this?

Last time I looked churches did not have to register for this purpose; only for payroll taxes if need be.

Can you imagine the IRS trying to register all groups of people who call themselves a church?

"Congress shall make no law regarding the establishment of religion....." etc, 1st amendment.

[zeros]

Deadline April 30th

I had heard on the radio that the deadline to file non-profits was April 30th and that some law was changed effective 2006. Not sure whether this pertained to a church.

[Jiggers]

Church with no payroll?

How do they pay their preacher/minister? Surely not on a 1099!

They do need to pay him by way of a W-2. That requires an EIN.

Still, no non-profit tax return needs to be filed for the church.

[Uncle Sam]

Church Filings

As another poster mentioned - churches are not required to file.

Even if they did - the filing date for calendar year tax exempt entities is May 15th - not April 30th.

[MAMalody]

As has already been stated, churches are not generally required to file non-profit tax returns.

In reference to the W-2, many small churches only pay their ministers a housing allowance and that is not required to be listed on the W-2 therefore they have no W-2 requirement.

[Burke]

As has already been stated, churches are not generally required to file non-profit tax returns.
In reference to the W-2, many small churches only pay their ministers a housing allowance and that is not required to be listed on the W-2 therefore they have no W-2 requirement.

I do W-2's for a church, which includes a payment to a retired minister which is all designated as housing allowance. I have included his along with everyone else's. However, are you saying that one should not be produced for this retired person? I would have thought it should be on 1099-R, but there is no way to designate that it is a housing allowance on that form.

[ChEAr$]

I do W-2's for a church, which includes a payment to a retired minister which is all designated as housing allowance. I have included his along with everyone else's. However, are you saying that one should not be produced for this retired person? I would have thought it should be on 1099-R, but there is no way to designate that it is a housing allowance on that form.

Certainly not on a W2 form which is for active employees. And of course the 1099r is also not appropriate.
How about a 1099misc? box 3?

[Burke]

No way to designate housing allowance, which is income-tax free, on that form either. I could just see the CP 2000's now.

[JohnH]

There's no requirement that any document be prepared to report the Housing & Utilities allowance to IRS for any minister. They say the church CAN report it via a memo in Box 14 of the W-2, but that's strictly optional. As Burke pointed out the 1099-R for a retired minister doesn't have a place to report it - the minister must attach a statement to the income tax return explaining it. So a minister whose entire compensation is HU& allowance just needs to comply with the reporting requirements on his/her 1040.

[ChEAr$]

It appears then that absent a W2 form, the only proper way is to inform said
preacher on church letterhead the amount of his housing allowance.

Only problem there is not all churches have a letterhead. (grin

[JohnH]

I'm sure there's a church somewhere (probably in NC or GA) that thinks having a letterhead is UnBiblical.

[ChEAr$]

I'm sure there's a church somewhere (probably in NC or GA) that thinks having a letterhead is UnBiblical.

A thought crossed my mind after posting. Imagine if you will (and you're not required to) a small church in the eastern Kentucky hills with a letterhead of entertwined rattlesnakes as a logo.

(grin

[JohnH]

Reminds me of the story about the group of guys who went around to churches playing gospel music. One night right in the middle of the service the pastor pulled a couple of snakes out of a box and started passing them around.

The lead turned to the drummer & yelled "Where's the back door to this place?"
Drummer replied "They ain't got a back door!".
The lead shouted "Well, reckon where do they want one?"

[MAMalody]

I do W-2's for a church, which includes a payment to a retired minister which is all designated as housing allowance. I have included his along with everyone else's. However, are you saying that one should not be produced for this retired person? I would have thought it should be on 1099-R, but there is no way to designate that it is a housing allowance on that form.

A church that has a retired pastor, would use a W-2 to report taxable compensation. If all he receives is housing there is no requirement to issue a W-2 and you should not issue one. If you software is like mine, there is no way to transmit a W-2 with no entry in box 1 (box 1-6). It would not be on a 1099-R because we do not report earned compensation on a 1099-R. Since the church must designate the housing allowance for it to qualify to start with, the pastor should be able to get a copy of the miniutes, budget or whatever is being used to designate the amount and keep it for his records and use on the tax return. I would also not recommend putting the housing on a 1099-Misc. It very simply has no required reporting document.