User Support Forum

The 941 Report includes the pastor's salary in lines 5a and 5c even though I have not set up any payroll deduction items for him since he has elected out of Social Security and Medicare. Also, the monthly tax liability amounts for Part 2 only include the withholding amounts and not the employer liability. The employer liability is set up for each employee and accrues properly in the fund accounting module. Are these problems with the report or do I have something set up incorrectly?

JOHNTAYLOR wrote:The 941 Report includes the pastor's salary in lines 5a and 5c even though I have not set up any payroll deduction items for him since he has elected out of Social Security and Medicare. Also, the monthly tax liability amounts for Part 2 only include the withholding amounts and not the employer liability. The employer liability is set up for each employee and accrues properly in the fund accounting module. Are these problems with the report or do I have something set up incorrectly?

Probably something is not setup correctly.

Which version of Powerchurch are you using?

If you're using V11, then make sure you do NOT select the Pastor's income as Type Taxable. Even though you are not including payroll items for SS & Medicare, the system will still pull that data for those area.

Select the <other options> type, and only select any Federal or State Income Taxes listed. I'm fairly sure that will take care of this problem.

Finally, a friendly hint. Each area of Powerchurch has a corresponding area in the Forums, this is an Accounting question, and should normally be asked in the Accounting forum. Just a hint for the next time.

Thanks for the reply Neil. I am using V11. If I change the pastor's salary to "not taxable", won't that exclude from wages, tips and other compensation that goes on line line 2 of the 941? His pay is subject to income tax, but not social security and medicare.

JOHNTAYLOR wrote:Thanks for the reply Neil. I am using V11. If I change the pastor's salary to "not taxable", won't that exclude from wages, tips and other compensation that goes on line line 2 of the 941? His pay is subject to income tax, but not social security and medicare.

Note .. .I'm not saying you're making the income Not Taxible, you will be changing the type to <other options> this will give you a list as you'll see in the example from our pastor's income item here:
As you see, when you select <other options>, it will list all the tax deductions items you created in the system. You just select the one's that will be applicable. As you can see in the example, all the federal, state and local income taxes are applied against this income item, but SS & Medicare are not.

Great. Thanks for the help Neil.

Thanks, I needed that information.