Clergy Specialists

[S T]

I am hoping some of you can assist me.
This is my first Work Comp Audit on Clergy (new account I just acquired) I have accomplished correcting the payroll and housing allowance for 2011 - I think I am good to go for Jan 2011 - current 2011
But now, I have the Work Comp Audit and prior accountant was not separating the two Pastor Amounts for Housing Allowance. (Audit covers prior period in 2010 -2011)
The prior CPA was "entering" a calendar year end journal for housing allowance - but I have this audit period on Work comp for August 2010 to August 2011. So I am having to calculate the "housinge allowance" for August 2010 to Dec 2010 - I have already corrected Jan 2011 to August 2011 in the payroll records to separate on each pay period.

Question, for anyone that knows,

Is the Housing Allowance amount subject to Work Comp Premiums??? The audit request asks for total payroll and the amount of housing allowance? Based on some "google info" I am thinking that the Housing Allowance could be excluded from the Work comp - ????

As well as any pre-tax health insurance, and retirement?

But wanted to see what a few of you that deal with clergy had to offer in your experience.

Thanks

Sandy

[taxmanken]

Housing is considered compensation

I practice in Pennsylvania and without a doubt the clergy housing allowance must be included with compensation for the WC audit. I'd imagine this is true in other states as well. Clergy Housing Allowance is not a separate category of income. It is merely a subset of Salary that has been designated for housing expenditures.

[dsi]

Could this be something that varies from carrier to carrier?

[JohnH]

I've never run into this before, which is a little surprising now that I think about it. But off the top of my head, I'd tend to agree with taxmanken.

Clergy H&U allowance is a subset of salary, and it only becomes non-taxable if spent for H&U purposes. Otherwise it finds it way back into taxable income on the individual tax return. So from a workers comp perspective, its special conditional tax status might not matter.

I'll be interested to read what others might say about this.

[taxmanken]

Compensation subject to WC

I did some further checking on WC in Pennsylvania. Gross compensation (before any pre-tax deductions), bonuses, incentives, tips, vacation and holiday pay are all included for WC purposes. In addition to these, employer paid room and board are also included in the WC base.

[MAMalody]

I understand WC to be a state specific item. There is not one size fits all answer here.

[erchess]

Not expert

I am not a clergy expert but I have done a few and even the payroll for one church. Both my payroll software company and NC Employment Security Commission told me that no NC payroll reporting or tax is due for a minister.

[S T]

Clergy-Church WC Audit

Thanks all for posting albeit after the fact.

I simply did a spreadsheet for what was classified as wages, housing allowance, and then separate columns for all pre-tax health care and retirement.

This was a Church in California.

So unlike the prior accountant, not taking into consideration any of the Pre-Tax Health and Retirement Benefits - we were able to reduce the amount that the Work Comp was based on.

Yes, the Pastor's Housing was included as compensation in the total compensation.

The Church received a nice refund on the prior year Work Comp premium and their subsequent year 2011/2012 Work comp Deposit premium was considerably less.

So guess, as MAMalody posted, it could be State specific based on the State Work Comp laws/regulations.

Thanks for the info and support,

Sandy