SEVEN YEAR-END HUMAN RESOURCES TO-DO'S FOR CHURCHES
The following seven year-end tasks are ones you don’t want to overlook as you wrap up the year. Take some time to review each one and make sure you have completed these before you say goodbye to 2024.
Employee Classification and Compensation
Review job descriptions to determine:
Proper classification for ministerial exception
Exempt vs. non-exempt employee status
Correct classification for Social Security and Medicare purposes
Designate a Housing Allowance
The church board or congregation should designate and document a housing allowance for 2025 for ministers prior to January 1, 2025.
Update W-4 and Withholding Information
Have all employees review and update their Federal W-4 forms and state tax withholding forms.
Ensure ministers properly document their tax withholding preferences.
Address any potential tax withholding issues, especially for dual-income households.
Review and Update Compensation and Benefits
Review compensation and benefits packages for 2025.
Ensure proper documentation of compensation.
Have employees sign an annual summary of compensation and benefits.
Have employees complete benefit elections for:
Cafeteria plans (Section 125 plans)
Health insurance enrollment
Health insurance opt-out certificates
Retirement plan contributions
Update compensation changes with the Missionary Church national office (dianaboyer@mcusa.org) for long-term disability coverage.
Properly Report Fringe Benefits
Identify and report all taxable fringe benefits on W-2 forms, including:
Low-interest or forgiven loans
Free camp attendance for employees' children
Free gym memberships
Personal use of church-provided vehicles
Withhold appropriate taxes for these benefits
Verify Independent Contractor Management
Review payments to independent contractors
Collect and verify W-9 forms
Prepare for filing 1099-NEC forms (due January 31, 2025)
Address Additional HR Considerations
Review and sign annual conflict-of-interest forms
Ensure an accountable expense reimbursement plan is in place
Avoid monetary gifts to volunteers to prevent employment classification issues
These items, as well as additional year-end financial to-do’s, can be found by accessing the article “Mastering Seventeen End-of-Year Financial Tasks” at Church Law and Tax.