CARES ACT FOR CONGREGATIONS
Q: Does the Families First Coronavirus Response Act payroll tax credit apply to church employees?
A: From Tom Cunniff, General Counsel, Evangelical Lutheran Church in America:
With more schools announcing that they are starting the fall term with remote learning, we are getting an increasing number of inquiries about church employees (particularly ministers) taking leave to care for children. One issue that has arisen is the extent to which the required paid leave (and commensurate payroll tax credit) under the Families First Coronavirus Response Act (FFCRA) apply to church employees. While there is no blanket exemption for churches, there are several reasons why the FFCRA leave may not apply to church employees, and to ministers in particular:
- The FFCRA applies only to employers that are engaged in commerce. Most congregations or their employees are not going to be engaged in commerce, unless they have a school or similar activity. This is the same issue that arises with regard to overtime under the FLSA.
- For pastors, the ministerial exception to employment laws may apply. (Note, this has not yet been tested with the government or the courts.)
- Employers with fewer than 50 employees (most congregations) and who certify to certain hardships are exempt from the leave provisions to the extent the leave is used to care for children whose school is closed.
- It is not clear that housing allowance is counted in ministerial income so that it could be refunded through the tax credit.
Some helpful resources on this are:
Our resource (borrowed from UCC):
DOL FAQ (see particularly questions 58 and 59 regarding the small business exemption): https://www.dol.gov/agencies/whd/pandemic/ffcra-questions
Methodist Church FAQ: : https://www.gcfa.org/media/2174/ffcra_rev03312020.pdf
Q: Does the Federal CARES Act apply to congregations?
A. Yes. See resources below:
>FAQ's regarding CARES Act as it pertains to congregations--Please read before completing your SBA application.
>Q: PPP payroll calculation does not include independent contractors. Pastors are generally viewed as self-employed. Is the pastor’s compensation included in the payroll calculation for purposes of the PPP?
A: Tom Cunniff, ELCA General Counsel offers this position:
Pastors are self-employed for FICA/SECA (social security purposes) only; they are employees for W-2/1099 purposes, i.e., they are employees, not independent contractors. Therefore, we take the position that they are included. If they are not called, but are contracted and get a 1099, then that is different.
>Additional detailed explanation resource: Small Business Owner's Guide To The Cares Act
>FAQ's from the Federal Small Business Administration for Faith Based Organizations
>Payroll Protection Program loan documents https://home.treasury.gov/
>What Recent Legislation Means for You from Portico:
>Video instruction from ELCA regarding Paycheck Protection Program
CARES ACT FOR INDIVIDUALS
The following information is from the IRS website. Please visit it for more details and additional resources. https://www.irs.gov/coronavirus/non-filers-enter-payment-info-here
Who is eligible for the Economic Impact Payment?
U.S. citizens or resident aliens who:
- Have a valid Social Security number,
- Could not be claimed as a dependent of another taxpayer, and
- Had adjusted gross income under certain limits.
Who will receive the Economic Impact Payment automatically without taking additional steps?
Most eligible U.S. taxpayers will automatically receive their Economic Impact Payments including:
- Individuals who filed a federal income tax for 2018 or 2019
- Individuals who receive Social Security retirement, disability (SSDI), or survivor benefits
- Individuals who receive Railroad Retirement benefits
Who should use Non-Filers: Enter Payment Info to provide additional information to receive the Economic Impact Payment?
Eligible U.S. citizens or permanent residents who:
- Had gross income that did not exceed $12,200 ($24,400 for married couples) for 2019
- Were not otherwise required to file a federal income tax return for 2019, and didn't plan to
You can provide the necessary information to the IRS easily and quickly for no fee through Non-Filers: Enter Payment Info. We will use this information to determine your eligibility and payment amount and send you an Economic Impact Payment. After providing this information you won’t need to take any additional action.
Information You will Need to Provide
- Full name, current mailing address and an email address
- Date of birth and valid Social Security number
- Bank account number, type and routing number, if you have one
- Identity Protection Personal Identification Number (IP PIN) you received from the IRS earlier this year, if you have one
- Driver’s license or state-issued ID, if you have one
- For each qualifying child: name, Social Security number or Adoption Taxpayer Identification Number and their relationship to you or your spouse
What to Expect
Clicking “Non-Filers: Enter Payment Info Here” above will take you from the IRS site to Free File Fillable Forms, a certified IRS partner. This site is safe and secure.
Follow these steps in order to provide your information:
- Create an account by providing your email address and phone number; and establishing a user ID and password.
- You will be directed to a screen where you will input your filing status (Single or Married filing jointly) and personal information.
- Note: Make sure you have a valid Social Security number for you (and your spouse if you were married at the end of 2019) unless you are filing “Married Filing Jointly” with a 2019 member of the military. Make sure you have a valid Social Security number or Adoption Taxpayer Identification Number for each dependent you want to claim for the Economic Impact Payment.
- Check the “box” if someone can claim you as a dependent or your spouse as a dependent.
- Complete your bank information (otherwise we will send you a check).
- You will be directed to another screen where you will enter personal information to verify yourself. Simply follow the instructions. You will need your driver’s license (or state-issued ID) information. If you don’t have one, leave it blank.
You will receive an e-mail from Customer Service at Free File Fillable Forms that either acknowledges you have successfully submitted your information, or that tells you there is a problem and how to correct it. Free File Fillable forms will use the information to automatically complete a Form 1040 and transmit it to the IRS to compute and send you a payment.