Correcting your Form(s) 941&W-2

Pastors pay their Social Security and Medicare tax the same way a self-employed person would, through self-employment tax.  As a result, it is incorrect to withhold and match Social Security and Medicare taxes for a minister.  When these taxes have been withheld in error the quarterly 941(s) and W-2(s) need to be corrected. You will need an original W-2c and W-3c.  The downloaded version of these forms is for informational purposes only.  You may find forms at your post office or library.  You may also call 1-800-TAX-FORM and ask for copies to be mailed to you.

You will need to know the following amounts when correcting your 941(s) and W-2(s):

1.  The “total tax” you paid in error as Social Security and Medicare taxes.

2.  Half of the amount of the “total tax” which will be referred to as the “half”.  (This is also the amount which was withheld from the pastor’s wages.)

Correct your 941(s):

The following instructions should not result in an overpayment or an underpayment.  The net result would be zero balance due.
1.  Prepare new quarterly 941(s) correctly by not showing your minister’s income in column 1 of blocks 5a & 5c.  Neither would you show any taxes for your minister in column 2.

a.  Increase block 3 by the “total tax” you are no longer reporting in column 2 of blocks 5a & 5c.  (This will move the amounts you paid for Social Security and Medicare into Federal Income tax withholding).

b.  Increase block 2 by “half” of the amount you included in block 3.  (This is because the matching portion of the Social Security and Medicare taxes need to be included in income.)

2.  Prepare a 941-X showing the previously reported amounts (from your incorrectly submitted 941(s)) and the correct amounts (from the 941(s) you have just prepared).

3.  Mail your 941-X to the address where you would file your 941(s) if you were not making a payment.

Correct your W-2(s):

1.  Prepare Form W-2c.

a.  Increase block 1 by the “half”.

b.  Increase block 2 by the “total tax”.

c.  Decrease blocks 3, 4, 5 and 6 to zero.

2.  Mail the top copy of W-2c with a W-3c to:

Social Security Administration
Data Operations Center
Wilkes-Barre, PA  18769-0001

3.  Keep a copy of the W-2c for your records and give the rest of the copies to the minister.

Attention: Tax Law is subject to interpretation. Please be advised that the material contained on this Web site is for information only and is not intended to be a substitute for professional legal advice. The Stewardship Services Foundation endeavors to update the information on this site on a regular basis, but cannot guarantee its accuracy at all times.