Medical Insurance Reimbursements subject to payroll tax?

[HWessling]

Are medical insurance reimbursements subject to payroll tax for an ordained minister?

[Randy B]

In order to correctly answer your question, I believe we need to know how is the church making the reimbursement? Generally most churches that I know of pay the medical insurance as a benefit to the provider. In this case the is a non-taxable benefit. I think you should specify if the church has established a section 125 plan and is the reimbursement made out of that or is the church just simply writing a check to the minister after he supplies some type of documentation on the cost.

[HWessling]

We are provided a pay stub from the spouse documenting the amount they pay for medical insurance. Once a month a check is cut to this person to reimburse him for that expense. I will check into and see if we have a section 125 plan. I haven't had this position that long and am planning on talking with our previous treasurer. It was just brought to my attention if this should be reimbursed gross (pre tax) like other industries do. I was just wanting some clarification.

Thanks!
Heather

[Matt]

So the spouse actually has the health insurance coverage for your minister? If so, I would think that reimbursing your minister for this would be taxable income to him because the church is not actually providing the insurance coverage. If the church was paying for the insurance coverage then it would not be taxable income.