how to report insurance benefits

by Ana
(Miami, FL, USA)

How should insurance benefits for pastors (health, dental, vision, health savings accounts, retirement, life insurance, disability insurance) be reported in the 941 & W2 forms? Are they considered income? Are they tax free or not? If they're not all treated the same way, which ones are tax free and which ones are not?

Comments for how to report insurance benefits

Click here to add your own comments

Nov 22, 2013
Taxable Benefits
by: Vickey

It all depends on how the plans are set up. For example, payments on life insurance premiums on a policy where the church is NOT the beneficiary would be a taxable fringe benefit.

Please check with a knowledgeable CPA in your area or contact Bill O'Connell, CPA from Tell him Vickey sent you:)

Not sure how much a CPA consultation would cost, but I can promise you it would be worth every penny.

Payroll issues such as this one is the number one reason churches get in trouble with the IRS.

Click here to add your own comments

Join in and write your own page! It's easy to do. How? Simply click here to return to Church Accounting FAQs.

If you want to DIY your payroll, I highly recommend you look at using Gusto! It is very user friendly and their support is awesome! Plus they know how to set up and maintain payrolls for churches and nonprofit organizations.

Note: I am a "partner" of Gusto, but as I have told you before ... I never recommend anything that we or our clients have not tried and love =)

Share this page:
Enjoy this page? Please pay it forward. Here's how...

Would you prefer to share this page with others by linking to it?

  1. Click on the HTML link code below.
  2. Copy and paste it, adding a note of your own, into your blog, a Web page, forums, a blog comment, your Facebook account, or anywhere that someone would find this page valuable.