Medical Allowance for Pastor

by Janice
(Washington)

Question regarding a medical allowance for our pastor:

I am the bookkeeper at our Church and am trying to finish up the W-2's for all employees.

Our Pastor has a non-taxable Medical Allowance specified each paycheck. The church does not pay any of his medical premiums or expenses.

He has established his own HSA account through a bank and he personally deposits the allowance in that account and pays out of that account. He has receipts and documentation to support his expenditures.

Where does the Medical Allowance get reported on the Pastor's W-2?

Answer

I believe that if you made those payments directly to the Pastor and the church did not pay the insurance company directly...the medical allowance would be considered taxable income...in which case you would report it in box 1 with the rest of his wages.

Hope this helps,



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