Withholding social security allowance

by Cari
(Mansfield, Ohio)

We have a ordained/licensed pastor we pay $200 a week. The deacons voted and want to start paying the "employer" portion of the SECA tax, 7.65% being added to his weekly check. Therefore, I will be writing a gross check of $215.30 each week. Will he need a W-2 at year end? Will the $200 go in box 14 like regular housing allowance and the $15.30 go in box one as income? Or is it all counted as housing allowance?

Comments for Withholding social security allowance

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Oct 07, 2015
Questioning your question
by: Lewis in NC

So your questions is what goes on the W-2 form? My clarifying question is what is the church's properly approved housing allowance?

Oct 13, 2015
by: Cari

The church approved $200 a week for housing allowance and then at the next meeting approved $15.30 (7.65% of $200, the "employer portion") to also be included--but it is for social security allowance, no specifically for housing allowance. Yes, my question in what goes on the W-2. I'm assuming the $15.30 will go in box 1 as income and the housing allowance ($200) will go in the optional box 14. Do you think that is correct? Or can I put all as housing allowance?

Sep 27, 2016
by: Anonymous

Was there ever any answers to these questions? I am in a similar situation but including medicare tax...

Oct 10, 2016
Sorry no
by: Cari

I never got an answer to my W-2 question last year.
In my own research I came across some helpful info. This PDF was invaluable: https://www.clergytaxnet.com/understanding-clergy-w-2-forms/

Also, in the W-2 IRS instruction booklet for 2015, pg 15--for Box 1, #12 answered my question as to what to do about employee's share of medicare/SS taxes paid by employer.

Hope that helps.

Oct 10, 2016
I Apologize
by: Vickey

Cari, I apologize that your question was never answered, but thank you very much for responding to the latest comment in this thread!

That is a wonderful Pdf you shared the link to!

Just to clarify what Cari has graciously shared...the Self Employment Tax ... commonly called a "Social Security Allowance" is taxable income and would go into box 1 on a minister's W-2.

But as the PDF she shared points out...FICA (Social Security and Medicare) is NOT withheld or matched with a MINISTER'S compensation.

You are allowed to make up for that by including a SS Allowance as part of a minister's compensation package...but it is taxable and has to be included in box 1.

See this more on completing a minister's W-2 on this page:https://www.freechurchaccounting.com/example-of-pastors-W-2.html

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