As part of my pastoral compensation package, my church regularly reimburses the amount of my Social Security, which I have paid quarterly and counts as income for income tax purposes. Would it be possible for me to have the church treasurer “withhold” this amount and pay it for me in lieu of quarterly payments? If so, what is the best way to handle this?
Yes, this is possible. The church would need to withhold the amount you desire to have withheld as federal income taxes—not as Social Security tax. The church would remit the federal income tax withheld to the IRS and report the amount on the quarterly Form 941.
Dan Busby, President of the Evangelical Council for Financial Accountability (ECFA), is a nationally recognized author and speaker and a member of the Commission on Accountability and Policy for Religious Organizations.