Church Financial Info

Tax News & Payroll Procedure Updates

The Clergy Tax Journal is an email newsletter created exclusively for clergy and churches that features breaking tax news, tax tips and services that affect your ministry. Below is some excerpts for the latest edition that you may find helpful.

Clergy Tax Law Update: The Internal Revenue Service recently announced cost-of-living adjustments for pension plans and other retirement-related items for the tax year 2015. Most clergy will be able to increase the amount of maximum contributions into their church pension. Find out how much you can contribute.

Church Payroll Procedures – New Hire Checklist: Before an employee can begin work, the church must have certain documents on file to prove that the worker is indeed eligible to work in the United States. Find out which documents your church needs on file for every worker. 

HR Hot Topic: Our employees often don’t turn their timesheets in on time. If an employee doesn’t submit his sheet on time, can we delay processing his paycheck until the next pay period? Find out the answer.

Clergy Financial Resources
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ClergyTaxNet.com

Recent IRS Tax-Exemption Changes DO NOT Apply to Churches

Church Treasurers: The following directive was received on May 10, 2013 from April Davenport, PC(USA) Associate General Counsel, with regard to IRS Form 990. Please be guided accordingly. Information on IRS Form 990-T is detailed below if you need to refer to it.

Dave Boltz, Treasurer
Lehigh Presbytery
May 13, 2013

We have received reports that some churches have received a notice from the Internal Revenue Service (“IRS”) stating that they are required to file IRS Form 990, Return of Organization Exempt From Income Tax.  The Group Ruling held by the Presbyterian Church (U.S.A.) which provides 501(c)(3), tax-exempt status to the group, also exempts Presbyterian Church (U.S.A.) congregations, presbyteries, synods, and the General Assembly from filing Form 990.  If your mid council or a church in your mid council has received a letter from the IRS asserting that Form 990 is due, please contact staff listed below from the Office of Legal and Risk Management Services of the Presbyterian Mission Agency immediately for assistance.  Please do not ignore these letters from the IRS.  Please also note that exemption from the requirement to file Form 990 does not extend to Form 990-T which relates to unrelated business income.

April L. Davenport, Associate General Counsel
(502) 569-5350
gro.a1545030989sucp@1545030989tropn1545030989evad.1545030989lirpa1545030989

Rebecca L. Rayner, Senior Paralegal
(502) 569-8021
gro.a1545030989sucp@1545030989renya1545030989r.acc1545030989eber1545030989

Recent IRS Tax-Exemption Changes DO NOT Apply to Churches

July 2010 – The nation’s media has been highlighting changes in IRS policy regarding tax-exempt organizations. Please not that churches do not have to apply to the IRS to maintain their tax-exempt status. For more information, see the brief synopsis from the IRS below or on the IRS website.

The Pension Protection Act of 2006 , made two important changes affecting tax-exempt organizations, effective the beginning of 2007. First, it mandates that most tax-exempt organizations, other than churches and church-related organizations, must file an annual return or submit an electronic notice, with the IRS. The Form 990-N, was created for small tax-exempt organizations that had not previously had a filing requirement. Second, the law also requires that any tax-exempt organization that fails to file for three consecutive years automatically loses its federal tax-exempt status. The IRS conducted an extensive outreach effort about this new legal requirement but, even so, many organizations have not filed returns on time. This one-time limited relief program helps small organizations preserve their status.