2019 W-2 forms are due to all employees by January 31, 2020. Information to help with preparing IRS Form W-2 for clergy, which can be complicated, can be found on the Conference website. Use the worksheet and example here as a guide for preparing your pastor's W-2. This sample spreadsheet and W-2 is just that, a sample. Your fact set may include more or fewer items to report (for example, moving expenses which are now taxable if paid or reimbursed are not in the sample).
Highlights for 2019 W-2's include:
- Moving expenses paid by churches directly to moving companies or via reimbursement to clergy are taxable and must be reported as income (see the moving expense section of IRS instructions completing W-2's here).
- If your pastor received health insurance through the Conference Plan (Aetna) they received a contribution to their HSA account that should be reported. Clergy on single plans received $500 in January and July 2018 for a total of $1,000. Clergy on Family-2 or Family-3 plans received $1,000 in January and July for a total of $2,000. If two churches share in the cost of health insurance, adjust accordingly.
- All full time clergy and some 3/4 time clergy receive a $50,000 death benefit through a conference plan. This is in addition to $50,000 available through the denominational plan (CPP). The cost of group life insurance over $50,000 is taxable. The imputed income can be calculated based on the table in IRS Publication 15-B.
- Note: If your pastor is not on the Conference health insurance plan and your church has not established its own qualified plan, direct payments to clergy to offset the cost of health insurance (for example on a spouse or other employer plan) are taxable income.
The resources referenced here and on the conference website should answer most of your questions. However, contact your payroll provider, a CPA or tax preparer if you have technical questions.