By Bruce Galvin
The Tax Cuts and Jobs Act, approved late last year by Congress, has one provision that will impact all local churches and pastors where there is a clergy transition and a moving expense being paid. Beginning this year the tax exclusion for moving expenses has temporarily been repealed so it is now included as gross income for the pastor.
This means the moving expense will increase the taxes paid by the pastor for both income and self employment. It does not matter who pays the moving expenses. Even if the pastor pays the moving cost, there is no longer a tax deduction.
Each pastor will be provided information about this change and a form for the local church to complete and return to the conference benefits officer on how much was paid for moving expenses for their new pastor. The form will be provided to the pastor at the end of June.
The moving expense will increase the plan compensation which will result in additional cost for the comprehensive protection and clergy retirement security plans. The conference board of pensions has agreed to pickup this additional cost.
At the end of the year the moving cost paid by the local church will need to be included in Box 1 of W-2 form. Additional information will be coming out about this with the annual tax filing letter to local churches later this year.
For additional information contact Bruce Galvin, Conference Benefits Officer, at firstname.lastname@example.org or 206-870-6819.