Payroll - group life insurance income item

[SunsetTreas]

The Methodist church (globally) provides group term life insurance to pastors, and the cost of that coverage must be reported as additional income for the pastor. It is NOT an expense of our church. I cannot find a way to add income to him without it being an expense to us. Will I just have to manually adjust the 941 and W-2 income lines for the pastor?

I just found another option - call the item a "taxable benefit" - then it doesn't require a liability or related expense account. Will this do the job?

[NeilZ]

The Methodist church (globally) provides group term life insurance to pastors, and the cost of that coverage must be reported as additional income for the pastor. It is NOT an expense of our church. I cannot find a way to add income to him without it being an expense to us. Will I just have to manually adjust the 941 and W-2 income lines for the pastor?

I just found another option - call the item a "taxable benefit" - then it doesn't require a liability or related expense account. Will this do the job?

Using the 'Taxable Benefit' pay item you'll find that it provides the proper settings to enter a "C" code in Box 12 (which is required), also it will show all the tax items (Federal, State, SS, & Medicare) that it may be taxed under. Notice it does NOT ask for any expense account, as it is not an expense to the church.

When you go to add this pay item to the employee, you'll get a box that will ask for the amount of the benefit. You will have to divide the yearly cost by the number of paychecks (IE: Paid monthly by 12, twice a month by 24, etc.)