Moving Expense Payments to Clergy

Moving Expense Payments to Clergy


Sally Truglia

8/14/2018

Greetings!

This is a follow-up to Ross Williams’ May 3, 2018 email entitled “Move Costs are Now Taxable.”  https://www.nyac.com/blogdetail/11323364   I visited the Wespath offices recently and was advised to remind all churches and pastors about the “Tax Cuts and Jobs Act of 2017” enacted in December 2017, which taxes the moving expense payments made to or on behalf of individuals, including clergy.   Moving expenses are now considered “compensation” under US Tax law.  Wespath has created a detailed Q & A on this subject which you can view here:  https://www.wespath.org/assets/1/7/5236.pdf

Since the moving cost reimbursement increases clergy compensation, it will need to be reported to Wespath for UMC pension calculations. To assist our clergy and churches with compliance of this new rule, we have developed and attached a short form, Moving Expense Payments to Clergy which you can complete and send to our office.  Once received, we will update the Wespath database (used to compute pension benefits) by adding the moving reimbursement to the clergy’s salary. CPP, CRSP and UMPIP monthly billing will increase slightly each month, since the additional funds are added to the pastor’s gross annual salary from which these pensions are calculated. This also means that pension benefits, upon retirement, may show a slight increase.   

Regardless of whether the church reimbursed the clergy or paid the mover directly, the associated costs are considered income.  Therefore, clergy should be aware that moving costs are subject to self-employment taxes and churches need to remember to include the moving reimbursement as taxable income on the pastor’s W-2.

Wespath has also produced an informative, 3 minute video which you can watch here:   https://www.wespath.org/movingexpenses/     

Feel free to contact me if you have any questions or require further clarification.

Warm regards,
 
Sally