payroll or 1099

[JenLewis]

We pay our pastor a monthly salary, however he requested that no deductions be taken since his wife is employed. So do we have to do his pay through payroll, and how do I circumvent the tax and medicare deductions or do I just create a vendor profile with a 1099 attached for him?
JenLewis

[NeilZ]

We pay our pastor a monthly salary, however he requested that no deductions be taken since his wife is employed. So do we have to do his pay through payroll, and how do I circumvent the tax and medicare deductions or do I just create a vendor profile with a 1099 attached for him?
JenLewis

You should pay through payroll, just do NOT include any Federal Withholding, Medicare, or Social Security Pay Items. However, if there are state or local taxes, depending on local laws, the pastor may not have an option to not withhold taxes.

The reason you should pay through Payroll is that you MUST give the Pastor a W-2 to reflect his salary and ANY Housing Allowance given. Salary & Housing Allowances ARE taxable by SECA taxes, so they MUST be included.

You should not pay the pastor as a 1099 if he is an employee. Rules for this can be found here:

https://www.irs.gov/businesses/small-bu ... r-employee

Again, the pastor really has no say in this, if he is hired by the congregation, he probably falls under those rules as an employee.

[JenLewis]

Ok how do I circumvent the program to set up payroll so the deductions aren't taken. Or should I call the help desk to have them walk me through it?
JenLewis

[NeilZ]

Ok how do I circumvent the program to set up payroll so the deductions aren't taken. Or should I call the help desk to have them walk me through it?
JenLewis

Jen,

you just DO NOT add the Tax Type PAY ITEMs to the pastor's Pay Item list in under Maintain Employees in Payroll. If they are there, delete them.

FWIW .. unless you're running PCPlus Online, you're going to use your 90 days of free support, or they will charge you for their time. This information can be found in the PCPlus manual, both the printed manual as well as the PDF that can be found in the \Powerchurch\PCPLUS115 directory. I'm assuming you're using v11.55, right?