BP 11122023 129pm - Flipbook - Page 41
Mass Stipends: Mass stipends are taxable income for federal and state income tax, as well as
Social Security tax purposes. Stipends should be processed through the entity’s business office
and paid directly to the priest after fulfilment of the obligation. Stipend payments due to
Religious Priests that have taken a vow of poverty should be paid to the Religious House, not the
individual. 1099s should be issued by the location if annual Mass stipends total $600 or more.
See Stipend Guidelines.
Food Allowance: Food allowance paid to priests is compensation and should be included in
pay/W-2. Archdiocesan-approved food allowance guidelines should be followed. Note: Priests
do not have to accept the Archdiocesan approved food allowance. However, the amount paid by
the parish or mission for groceries, meals, etc. is considered taxable income and should be
included in priest’s pay and W-2, unless the amount is business related and properly documented
with names of attendees and purpose of business meal listed on back of receipt, which should be
retained and submitted with approved expense report. Contact the Archdiocesan Finance Office
for more additional guidelines.
FICA: FICA (Social Security taxes and Medicare taxes) should not be withheld on
compensation paid to all ordained ministers. If FICA is withheld, the accountant should file
amended 941 for current tax year.
Deacons: Deacons should not be compensated for services that involve regular duties of a
deacon. See Office of Permanent Deaconate Directory of Policies and Procedures.
Seminarian: Seminarians should be issued a 1099 for compensation, food allowance, etc. in
accordance with IRS guidelines.
Authorization of Wage Increases: The Leadership should approve all salary and wage
increases and bonuses in writing. Increases should be documented with a completed and signed
Salary Adjustment Form.
Gifts: Regardless of amount, the IRS considers cash gifts and the value of gift cards/certificates
or other similar items easily exchanged for cash as extra income. Bonuses, stipends, etc., paid to
clergy, employees, independent contractors, and volunteers should be included in pay and W-2
with taxes withheld or 1099, as appropriate. If a volunteer receives anything of value exceeding
$500 a year, that person may need to be treated as paid staff or as an independent contractor,
relinquishing important liability protection under the federal Volunteer Protection Act (as well as
becoming potentially liable, in the case of independent contractor classification, to pay selfemployment taxes). Further, recognizing the IRS’s ability to classify an individual as an
independent contractor is essential. Parishes and Schools could also become liable to significant
tax penalties and costly fines as they are responsible for properly classifying independent
contractors and staff. Link to Volunteer Protection Act PLAW-105publ19.pdf (govinfo.gov)
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