The church pays the half of the pastor's tax.

by Barurch

My church pays half of the taxes of the pastor quarterly.

I know the financial support for his tax from the church should be added to his income.

What is the best way to file 941 form in my case to reflect the church's help on 941 form?

Thanks in advance

Comments for The church pays the half of the pastor's tax.

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May 04, 2019
A SECA Allowance is Taxable Income
by: Vickey

Many churches help their ministers with all or part of their tax burden from being paid under the SECA system. See more on ministers and what the SECA system is on this page:

SECA employees are responsible for the entire 15.3% social security tax...unlike nonminister employees that are paid under the FICA system and only have to pay half that amount.

NOTE:By law,, a minister may not be treated as a FICA employee (

SO many churches decide to help their ministers with their full 15.3% SECA tax burden by paying half of SE tax. This additional amount is often referred to as a "SECA Allowance" AND is ALWAYS considered taxable income.

According to the IRS's "Minister's Audit Techniques Guide":

"If the church or church agency pays amounts in addition to salary to cover the minister's self-employment tax or income tax, these are also includible in gross income. Rev. Rul. 68-507, 1968-2 C.B. 485."

SO my answer to your question is to report that amount you give him for half his SE tax along with his wages/salaries on line 2 in the IRS form 941 and in Box 1 of a W-2.

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Join in and write your own page! It's easy to do. How? Simply click here to return to IRS Form 941.

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 =)

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