Step 10. Prepare a Form W-2 for every employee, including ministers employed by the church.
+ New in 2016: Congress enacted legislation in 2015 requiring that Forms W-2, W-3, 1099-MISC and 1096 be filed by January 31 and eliminating the extended due date (March 31) for electronically filed Forms W-3 and 1096. These changes are effective for returns and statements relating to calendar years beginning after 2015.
Step 11. Prepare a Form 1099-MISC for every self-employed person receiving non-employee compensation of $600 or more.
By January 31, 2017, churches must furnish Copy B of Form 1099-MISC Statement for Recipient of Miscellaneous Income to any self-employed person to whom the church paid non-employee compensation of $600 or more in 2016. This form (rather than a W-2) should be provided to ministers who report their federal income taxes as self-employed, since the Tax Court and the IRS have both ruled that a worker who receives a W-2 rather than a Form 1099-MISC is presumed to be an employee rather than self-employed. Other persons to whom churches may be required to issue a Form 1099-MISC include evangelists, guest speakers, contractors and part-time custodians.
Churches must send Copy A of Forms 1099-MISC, along with Form 1096, to the IRS by January 31, 2017, if non-employee compensation is reported in Box 7. If you file electronically, the due date for filing Copy A with the IRS is also January 31, 2017, if you are reporting non-employee compensation in Box 7. Otherwise, the deadline is February 28 if you file on paper or March 31 if you file electronically.
Form 1099-MISC is designed to induce self-employed persons to report their full taxable income.
