Children's Ministry Leader and Payroll Taxes?

by Carrie
(PA)

Question regarding Children's Ministry leader and payroll taxes:

I am a bookkeeper for a small church and we are hiring a children's ministry director this year.

Are the wages for this person treated like the minister's except for the housing allowance.

Should they be reported on a W-2 or 1099? Should payroll taxes be withheld?

Answer

He would have to met the IRS qualifications of a minister to have the dual tax status of a qualifying minister.

If he does not met these qualifications, you will need to determine if this person is an employee or independent contractor.

If you determine they are an employee, you will need to send in quarterly IRS Form 941s and report their income on a W-2.

If you determine they are an independent contractor you would report their income on an IRS 1099-MISC.

Hope this helps,



Church Accounting Package

www.freechurchaccounting.com