Preparing a Form W-2

Block 1 – Wages, tips, other compensation
This amount would not include any designated housing allowance.  Include all other wages, bonuses, gifts, non-substantiated reimbursements, the value of any non-cash gifts, and any other amounts given to the pastor that are not qualified fringe benefits.

Block 2 – Federal income tax withhold
Include any amounts you withheld from the pastor’s wages and paid by filing IRS form 941.

Block 3 – Social security wages
This block should have a zero or the word “none” in it.  Ministers are not employees for Social Security purposes and they do not have Social Security wages through their employers (churches).

Block 4 – Social security tax withheld
This block should have a zero or the word “none” in it.  Ministers are not employees for Social Security purposes and they do not have Social Security tax withheld through their employers (churches).

Block 5 – Medicare wages and tips
This block should have a zero or the word “none” in it.  Ministers are not employees for Medicare purposes and they do not have Medicare wages through their employers (churches).

Block 6 – Medicare tax withheld
This block should have a zero or the word “none” in it.  Ministers are not employees for Medicare purposes and they do not have Medicare tax withheld through their employers (churches)

Blocks 7 – 11
Leave these blocks blank.

Block 12 –
Employee benefits are reported in block 12.  A code is listed to identify the type of benefit and the amount provided is listed following the code.  Here is a list of the most common codes used by churches:
The value of group-term life insurance which is also included in block 1:  “C”
The elective deferred salary contributed to a 401(k) retirement plan:  “D”
The elective deferred salary contributed to a 403(b) retirement plan:  “E”
Moving expenses reimbursed to the employee (not included in block 1):  “P”
Employer contributions to a medical savings account:  “R”
Employer contributions to a health savings account:  “W”

Block 13 –
Check the “Retirement plan” box if employee or employer contributions are made to a retirement plan.

Block 14 – Other
The housing allowance is reported here.  List the amount of designated housing allowance and label it “Minister – see Schedule SE Housing Allowance”.

 
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