Minister income

[spanel]

As much as I love preparing difficult returns... these sometime drive me crazy..


My question... My position on a fill in / part time minister is that they receive a W2, just like a full time minister (no ss/med tax withheld on either side).

The church I attend insists this is incorrect and they need a 1099 (if the income is over $600) and in most cases because a fill in is $100 / week, no tax form is ever isssued.

Whats your stance? Do you have an IRS reg or pub you can reference?

Thanks!!

Chris

[Rapid Robert]

Why not start with one of many tax research resources from our host, TheTaxBook. "Occupations and Oddities" publication has an entire chapter devoted to ministers and tax treatment.

Maybe instead of part-time vs full time (which I don't think has any bearing on employee vs contractor), first question is whether the substitute is truly "duly ordained, commissioned, or licensed by a religious body
constituting a church or church denomination."

[spanel]

Why not start with one of many tax research resources from our host, TheTaxBook. "Occupations and Oddities" publication has an entire chapter devoted to ministers and tax treatment.

Maybe instead of part-time vs full time (which I don't think has any bearing on employee vs contractor), first question is whether the substitute is truly "duly ordained, commissioned, or licensed by a religious body
constituting a church or church denomination."

They are. Everything I read is w2, nothing except someones opinion is 1099

Thanks

Chris

[spanel]

Where is this occupations & oddities pub that you speak of?

Chris

[Uncle Sam]

TTB page 14-5

[spanel]

Thanks!! I have read that... nothing referencing a 1099 for ministers.

Thanks

Chris

[Uncle Sam]

See if this helps you: https://www.irs.gov/pub/irs-pdf/p517.pdf

If not, send me PM and I'll provide you with an e-mail of a person who is a tax pro in clergy

[Rapid Robert]

"TTB page 14-5".

No,that's not it. Occupations and Oddities is a separate publication (I have access via WebLibrary Plus subscription). It has 13 chapters (topics) that go into far more detail than the summary you typically find in TTB publication. I'm sure you can find a print version for sale if you go shopping at the Tax Materials Inc. web site.

[Rapid Robert]

The original question isn't really that complicated. The same rules apply to determine employee vs independent contractor here as everywhere else. Per the pub that Uncle Sam posted,

"Under common-law rules, you are considered either an employee or a self-employed person. Generally, you are an employee if you perform services for someone who has the legal right to control both what you do and how you do it, even if you have considerable discretion and freedom of action. For more information about the common-law rules, see Pub. 15-A."

[spanel]

The original question isn't really that complicated. The same rules apply to determine employee vs independent contractor here as everywhere else. Per the pub that Uncle Sam posted,

"Under common-law rules, you are considered either an employee or a self-employed person. Generally, you are an employee if you perform services for someone who has the legal right to control both what you do and how you do it, even if you have considerable discretion and freedom of action. For more information about the common-law rules, see Pub. 15-A."

So you opinion is that a fill in minister is a w2 employee?

Chris

[Rapid Robert]

I don't have enough info, you have to ask more questions. Compared to the full-time employee, does the substitute follow the same schedule, use the same facility and tools, follow the same program during the service, and so on? If s/he has to perform the same as the employee does, that would seem to me to be employer exerting control. But if s/he chooses the place and time, or makes other independent decisions regarding how to get the job done, then more like an IC.

[Anarchrist]

If you're talking about a guest speaker / pulpit fulfillment, then I believe a 1099. https://www.clergyfinancial.com/when...form-1099-nec/ seems to agree.

[Lion]

If the church is part of a larger national organization, or even just regional, its larger governing body might have a legal department that has researched your questions already and suggests or requires how payroll-type issues are handled. They might supply training materials &/or workshops for church treasurers. For instance, in my diocese, ECCT (Episcopal Church of CT) we treasurers are educated to put the priests we call on payroll as employees (they also suggest Paychex and not in-house). However, our "supply priests" who cover a Sunday or two while our priest is on vacation, are independent contractors, per our Diocese, so I as assistant treasurer doing A/P pay them by check, and our treasurer issues the Forms 1099-NEC. The supply priests hold themselves out as independent contractors, available for Sunday substitute work in our Diocese (and often in neighboring Dioceses, such as NY or MA or their original parishes). Ask lots of questions.

[Rapid Robert]

"The supply priests hold themselves out as independent contractors, available for Sunday substitute work "

I don't see how that has any bearing on whether or not the employer has the right to control what is done and how it is done. Employer vs. contractor status is not an election. For a guest speaker, sure -- they are in control of their work. But simply being a substitute priest at multiple locations does not make one an IC, any more than being a household employee at several different households makes one an IC.

[Dude]

The diocese I used to work for paid visiting priests on 1099. Administrators and musicians were paid on a W-2. I always thought this was backward with regard to musicians. The visiting priest was most often in the same diocese, which is the employer. They had NO control over how they conducted their "duties" as they were the same regardless of the church. The only control the diocese had over musicians was that the music had to be approved by the liturgical rules usually found in the Ordo. They weren't allowed to play Sandman by Metallica (which I found out when I suggested it as an entrance song for Father Sandman).