The Minister's W2 Form

You must give employees a W2 form by January 31. It will include the following:

Box 1: Total Wages, Tips, and Other Compensation (Before Deductions)

This includes:

All wages and salary paid during the year.
Love offerings and bonuses.
The value of the personal use of a vehicle leased or owned by the church (unless the amount is reimbursed to the church).
The value of noncash payments.
Any mileage allowance which exceeds the IRS rate.
Payments by the church into the person’s IRA.
Moving expenses paid by the church (unless exempted by IRS).

This doesn’t include:

Housing allowance.
Reimbursements made according to an accountable reimbursement plan.
Contributions to a 403(b) tax-sheltered annuity, or to a 401(k) plan.

Box 2: Federal Income Tax Withheld

For ministers, this box may also include the amount withheld, by agreement, to cover SECA taxes (this amount is always interpreted as federal income tax).

Box 3. Amount of Income Subject to Social Security.

Box 4. Social Security Tax Withheld.

For ministers, these boxes should be left blank. Churches should never withhold Social Security taxes for ministers. If an agreement is made to withhold money for Social Security (or SECA), it should all be lumped together and reported in Box 2.

Box 5. Amount Subject to Medicare Tax.

Box 6. Medicare Tax Withheld.

The Box 5 figure is usually the same as what’s in Box 3 (amount subject to Social Security tax). Social Security is paid on the person’s wages/salary only up to a certain amount (which changes every year), whereas Medicare is paid on the person’s entire wages/salary.

The Medicare tax withheld will be a percentage (such as 1.45%) of the amount in Box 5.

Both boxes should be blank for ministers.

Box 13

When "Deferred Compensation" is checked in Box 15, type "Code E" followed by a space and then the amount of contributions ("Code E 1500").

Box 14

The IRS doesn’t use this box. You can use it to provide any other information you want to give the minister. Examples: health insurance premiums, moving expenses paid, etc..

Box 15

If the minister participates in the United Brethren denominational retirement plan, at least two boxes must be checked:

"Pension Plan" to indicate participation in the Defined Benefit plan.

"Deferred Compensation" to indicate voluntary contributions (not salary increase agreements) made to a 403(b) tax deferred annuity.

Love offerings (such as at Christmas time) and bonuses must be included on the minister’s W2 under "Wages, tips, other compensation."