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Clergy compensation received in the form of a properly structured benefit package is free of federal, state, and city income taxes, as well as Social Security taxes.

Generally, the benefits portion of clergy compensation is paid directly by the employing church to the benefit provider.

Components of a benefits package may include the following: 403(b) TSA retirement savings plan; health/dental/vision insurance; disability income insurance; long term care (LTC) insurance; and up to $50,000 of term life insurance. Out of pocket medical expenses may be reimbursed tax-free as part of a properly structured medical reimbursement program. Please contact us to discuss which particular programs are allowable.

See our Audit Proofing Your Church & Its Clergy guide, Part IV, for:

• Clergy benefits worksheet
• Professionally-prepared Church Board resolution to establish an employee-funded medical reimbursement or “Health Care Deductibles Still Due By You” program.

• order the "Audit Proofing Your Church and Its Clergy"  Tax Guide
   

• schedule a conference call with a Financial Stewardship tax advisor and my church staff and/or church board
   

• inquire about a free review of my last two years' personal Income Tax returns
   

• inquire about a speaker for our next Pastors' Fellowship meeting