Based on guidelines from the IRS, the pastor's salary should be included on Forms 941 and W-2. NTS reports the pastor's income on Forms 941 and W-2 based on these guidelines. On Form 941, the pastor's income should ONLY be included on line 2 and not on line 5. Only non-ministerial employees' salaries should be reported on these lines.
The same is true for Form W-2. The pastor's income should not be reported as FICA and/or Medicare wages. See the illustrations below.
Your pastor's tax situation may be different. However, if you are unaware of any unique circumstances regarding your pastor's tax situation, the above guidelines will generally apply. Contact a local tax advisor or your district office if you need further assistance with how to report your pastor's salary or if you are unsure of your pastor's tax situation. The links below also have good information.
The information contained in this web page is of a general nature. It is not offered as specific legal or tax "advice." Each person, local church, and district should evaluate their own unique situation in consultation with their local legal and tax advisors. We are not responsible for the accuracy of information on other web sites including sites linked to from this page.
Nazarene Pensions and Benefits USA - Tax Helps Memo #3 - Tax and Reporting Procedures
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- Pensions and Benefits USA - Compensation and Taxes Memos