January is almost here and is a very busy month for churches concerning year-end reporting. Here is some important information for the start of the new year that every church should know.
1. The IRS has released the mileage rates for 2017:
- 53.5 cents per mile for business miles driven, down from 54 cents for 2016
- 17 cents per mile driven for medical or moving purposes, down from 19 cents for 2016
- 14 cents per mile driven in service of charitable organizations
2. New Department of Labor Rules concerning overtime
The DOL’s new rule raises the floor at which a person can be considered an exempt employee from $23,660 ($455 per week) to $47,476 or $913 per week. Ministers remain exempt employees even if the salary is less than $47,476. This new rule has been put on hold by a court in Texas, so stay informed. www.dol.gov/whd/overtime/NPRM2015/
3. New due date for W-2, W-3, A-3 and 1099
W-2, W-3, A-3 and 1099s are due January 31, 2017. The instructions for 1099 state “if you are reporting non-employee compensation in box 7” (which is the box churches use). The new due date applies to both state and federal and applies whether you file paper forms or electronically.
4. Employers who have been providing payments for individual rather than group health insurance
…are now prohibited from doing so and any money provided is taxable. Churches who have provided insurance in this manner must include the payment as regular taxable income on the 941s and on the W-2s to be issued in January. What qualifies as a tax-free benefit? Only group health insurance.
- GuideStone is a group plan even if only one person is covered.
- A group plan for church employees, such as GuideStone or Blue Cross, would qualify as a tax-free benefit.
- There is an exception for “groups fewer than 2” – in other words, when there is only one full-time employee at the church.
- There are a few other minor exceptions.
For more information, plan to attend one of the Church Tax Workshops during January to be held throughout the state. For dates and locations and to register go to ALSBOM.org/ChurchTaxConference or contact State Missionary Lee Wright at firstname.lastname@example.org or 334-613-2241.