CLERGY 2015 W-2

[TAXMAN]

To all my clergy friends. Does the health ins paid by the church direct to the ins co show up on the W-2 at all? I have been asked to prepare some clergy W-2's. I have everything covered but this issue still gives me a problem. What do you say?

[RitaB]

I always put Health benefits and Housing Allowance in Box 14.  Neither are required, but the tax preparer may not know about either of those if the W-2 preparer doesn't make him aware of it.  And it's always good for the employee to know what he really made.   They sometimes forget. 

[JJStephens]

First, I'm assuming the employing church is a small employer (the vast majority of churches are) and therefore, not subject to the large employer reporting requirement.

Were the premiums paid for a group health insurance policy? If not, they probably have a problem. I work almost exclusively with churches and other ministries and find that many of them are still paying premiums on private/marketplace insurance. In most cases that is no longer permitted. It might be worth inquiring about--might be a revenue generating opportunity helping the employing church correct their procedures.

[MAMalody]

Is there any way for churches to continue paying for employees’ health insurance through private insurers or state exchanges as a nontaxable fringe benefit? IRS Notice 2013-54 mentions three possibilities:
• The market reforms do not apply to a group health plan that has fewer than two participants who are current employees on the first day of the plan year.
• The market reforms do not apply to a group health plan with regard to “excepted benefits,” which are defined to include “among other things, accident-only coverage, disability
income, certain limited-scope dental and vision benefits, certain long-term care benefits, and certain health FSAs.” IRC 9832(c). As a result, these plans are not necessarily prohibited for failing to comply with the Affordable Care Act’s market reforms.
• Another option that may allow some churches to continue to pay employee insurance premiums on a pre-tax basis is to participate in the Small Business Health Options Program
(SHOP) marketplace. The SHOP marketplace makes it possible for small employers to provide qualified health plans to their employees. Some conditions apply. For 2014 the
SHOP marketplace is open to employers with 50 or fewer full-time equivalent employees (FTEs). You may qualify for tax credits if you use SHOP. The small business health care
tax credit that many churches received in the past is only available for 2014 for plans purchased through the SHOP marketplace.