IRS Reporting Requirements

IRS Reporting Requirements

Sally Truglia



Dear Pastors, Finance Chairs and Treasurers,

The end of the year brings the joyous celebrations of the Christmas season and the hope for a peaceful New Year.   Unfortunately it also brings some financial housekeeping issues with which we must all comply.  Listed below are some new reporting requirements and some annual reminders. 

1)   2015 W-2 Preparation:  All churches must prepare and distribute W-2 forms for their pastors and their lay staff by January 31.    

The value of the health care coverage would normally be reported in Box 12 of the Form W-2, with Code DD to identify the amount, since the Affordable Care Act requires employers to report cost of coverage under an employer-sponsored group health plan. For church plans, however, there is relief from the requirement to report the value of coverage. Therefore church employers that participate in HealthFlex do not have to report the cost of insurance coverage on the W-2 at this time.
Pastors who elected a Dependent Care Account must have this information reported on their W-2 in Box 10. (See attached.) This is a new requirement. 

Medical Reimbursement Accounts or the commonly called health FSA’s do not need to be reported on the W-2.

If your church has less than 50 full-time equivalent employees and your pastor is enrolled in HealthFlex, the General Board of Pension and Health Benefits will take care of many of your Affordable Care Act (ACA) reporting requirements

The General Board has an excellent webpage which outlines the new ACA tax and reporting requirements:   Please visit this site for detailed information about your responsibilities as a church.  Small employers (less than 50 employees) are basically exempt from the new ACA reporting, unless you provide health insurance for your staff that is not provided by the conference.  (If you are unsure of the qualifying number of full time employees, there is a calculator to help you determine if you need to complete additional tax forms.)

2)  Section 125 Agreements:  Many churches have valid Section 125 Cafeteria Agreements on file.  This agreement allows the church to offer the pre-tax deduction for the pastor’s portion of the HealthFlex uniform rate, FSA and HSA deductions, as well as the pastor’s UMPIP contribution.  You should be renewing your Section 125 Agreement every year.  The forms and information can be found on our website:

3)  Housing Resolutions:  Now is also a critical time to make sure that your pastor’s Housing Resolution is properly documented.  The conference has prepared a Housing Resolution template that you can use to record the housing agreement.  The sample resolution is attached to this email.

If you have questions about how Housing Allowances work, please go to:  

The staff of the New York Conference wish you and your church a wonderful Christmas!  We look forward to serving you in 2016.