Recently, an email from the Conference regarding the status of the Boy Scouts of America (“BSA”) bankruptcy litigation was sent to all pastors. If your church is currently, or ever was, a Chartering Organization, please click on this BSA Proof of Claim Authorization link to authorize the Bentz Law Firm to file a proof of claim on your behalf
For those churches or individuals considering the deferral of payroll taxes (withholdings and/or payments) beginning September 1, 2020, as authorized in an August 8, 2020, Presidential Executive Order,
the Conference Treasurer’s office recommends against such action. Because the tax law cannot be changed through an Executive Order, any payroll taxes deferred will have to be paid at a later date.
Should you have any questions, contact the Conference Treasurer at Click to email.
Read related IRS guidance here
The Fair Labor Standards Act (FLSA) overtime rule determines whether employees are eligible or exempt for overtime pay. Exempt employees, because of their rate of pay and type of work that they do, are not eligible for overtime pay for hours worked over 40 in a work week. Nonexempt employees must be paid "time and a half" for any hours worked more than 40 in a work week.
The Department of Labor (DOL) issued a final rule on Sep. 24, 2019 increasing the salary-level threshold for white-collar exemptions to $684 a week from $455 a week. The final rule is effective Jan. 1, 2020 and is estimated to extend overtime protections to more than one million workers who are not currently eligible under federal law.
Unless exempt, employees covered by the Fair Labor Standards Act must receive at least time and one-half their regular pay rate for all hours worked over 40 in a work week.
Meeting the salary threshold doesn't automatically make an employee exempt from overtime pay; the employee's job duties must primarily involve executive, administrative or professional duties as defined by the regulations.
While no exemption for clergy is included in the FLSA, some courts have held that it does not apply to clergy employees. While the DOL has not formally adopted any exemption in its regulations, both its Field Operations Handbook and the new Final Rule include language indicating that “clergy and other religious works” are not covered by the FLSA.
Nonprofits, such as churches and church-related organizations, also are not specifically exempted from the FLSA, although generally the DOL has acknowledged that the rule does not apply to a private, non-profit enterprise where the religious or educational activities are not in substantial competition with other businesses, according to the GCFA document. The rule may apply to churches or agencies with a preschool, school, hospital or residential care facility.
Note: Western Pennsylvania Conference of the United Methodist Church does not provide legal or tax advice. Please refer to the website of the General Council on Finance an Administration of the United Methodist Church for further information.
The 2023 rates are:
Effective July 1, The 2022 rates were:
The 2022 (Until June 30) rates are:
Social Security Rates
For 2023 an employer mush withhold:
As of January 2013, individuals with earned income of more than $200,000 ($250,000 for married couples filing jointly) pay an additional 0.9 percent in Medicare taxes. The tax rates shown above do not include the 0.9 percent.
Self-employed persons (clergy) are responsible for paying both the employee and employer portions of Social Security and Medicare taxes.
Parking & Transportation Fringe Benefit – Potential Impact for Churches
As part of the Tax Cuts and Jobs Act of 2017, the Internal Revenue Service (IRS) introduced provisions that could result in non-profit organizations incurring unrelated business taxable income (UBTI) for expenses paid or incurred after December 31, 2017. The General Council on Finance Administration (GCFA) Legal Services group issued a brief white paper to provide answers to frequently asked questions, along with step-by-step instructions for churches to assess their own situation.
If you have questions, contact Roger White, Conference Treasurer (724-776-2300 x239; Roger.White@wpaumc.org).