2017 Year-End Checklist

Year-end Checklist for Pastors, Treasurers and Leaders:

December 2017 EPS

Remember we are also closing our books for 2017.  please have all EPS funds for 2017 into the PNWC office no later than January 10, 2018.

Obtain New W-4’s From Staff

This is a great time to remind your employees(including pastors) to review their W-4 and confirm that the information is correct.

Update Salaries to Meet WA State’s New Minimum Wage

For any church employee (other than an ORDAINED minister), minimum wage laws must be followed.  Beginning January 1, 2018, the minimum wage in the State of WA is $11.50 per hour.  This applies to employees age 16 and older. Find out more HERE.

If you are in the city of Seattle, the minimum wage beginning January 1, 2018 will be changing.  Check out the Seattle wage laws HERE.

If you are in the city of Tacoma, the minimum wage beginning January 1, 2018 will be changing.  Check out the Tacoma wage laws HERE.

Review Clergy Payroll

Here are a couple reminders about clergy payroll:

  • Clergy have a dual status when it comes to payroll taxes.  They are an employee for federal income tax (FIT) purposes and self-employed for social security/medicare (FICA) taxes.
    • Double check your payroll and if the church or your payroll service is withholding FICA and paying it to the IRS for your ordained ministers…it is incorrect.   The IRS is very clear on this rule.
    • If they would like to have taxes withheld in regard to SS/MC (FICA), you may do this through a flat withholding through their Federal Withholding line.  They would need to complete a W-4 and indicate a dollar amount on line 6 for additional amount withheld.
  • Clergy are NOT to be issued a 1099, they are issued a W-2.
  • If you need to make corrections, please contact Cathy at the PNWC office.
  • Check out more info HERE

Approve 2018 Housing Allowances

For ministers that own or rent their home, it is required that you include each pastor’s housing allowance in your board’s minutes for tax/audit purposes.  Here is a link to more information regarding the PNWC Housing Allowance.  It is important to note that the housing allowances must be approved by the local church board IN ADVANCE of providing this benefit.

Here is an example for the board resolution (source: Church Law and Tax):

Whereas, Pastor John Smith is compensated by First Church exclusively for services as a minister of the gospel; and

Whereas, First Church does not provide Pastor John Smith with a parsonage; therefore, it is hereby

Resolved, that the total compensation paid to Pastor John Smith for calendar year _____  shall be $50,000, of which $15,000 is hereby designated as a housing allowance; and it is further

Resolved, that the designation of $15,000 as a housing allowance shall apply to calendar year ______ and all future years unless otherwise provided.

Submit Change of Status Forms for Pension & Long-Term Disability Insurance

The Change of Status with FMC-USA must be updated with any 2018 salary changes for pastors participating in the denominational pension plan.  Follow this link to make changes.  This will ensure that the pension plan is accurate for each of your pastors.  This information is also reported to the disability insurance carrier to update the Long-Term Disability Insurance for the pastors, as it effects benefits should a disability claim need to be filed.

Also, as a reminder, the pension contribution amount will be 13.5% beginning January 1, 2018.  

FMC USA Year End Reporting

As you know, churches are required to file an Annual Report each year. The web-site for you to report your 2017 stats will be open in January.  To prepare, you can DOWNLOAD A PDF of the Annual Report form from last year so you can print it and use it as a starting point to gather the data over the next month or so.

DON’T FORGET, if you have reported pass-through income this past year on your EPS reports, the Pass-Through Reporting Pass-through Reporting form is required. Please complete this and send it to cathy@pnwc.org when you complete the Annual Report.

World Missions Year End Giving

To ensure missions funds are distributed to the field most effectively:

  1. Church checks for missionary and country support must be dated in 2017 and postmarked no later than January 5, 2018.  Online gifts must be made no later than December 31, 2017.
  2. Local churches are asked to communicate their 2017 commitments for Country Support Accounts and Missionary Support Accounts to Free Methodist World Missions by one of these methods:

Ministry Pay Evaluation Tool

As your board prepares for 2018 budgeting, HERE are a couple of options you can use to assist you in your Pastors/Staff salary process.

If you have any questions regarding the year end process, please contact Cathy at the PNWC office.