Skip to main content

Reimbursed Moving Expenses and Form W-2


Are moving expenses that are paid to a new employee of a church reportable on Form W-2?


The answer to this question hinges on whether the moving expenses were qualified or non-qualified. If the moving expenses were qualified moving expenses, the amounts reimbursed to the employee are reported only in box 12 of Form W-2 with code P. If the moving expenses are non-qualified, then amounts are reported in boxes 1,3, and 5 of Form W-2 as taxable income. These amounts are also subject to income tax withholding. (Form W-2 Instructions) Of course as explained within other posts in this blog, boxes 3 and 5 are blank when an employee is a minister.

This answer if only helpful if the distinction between qualified and non-qualified moving expenses is made. Qualified moving expenses are expenses incurred under an accountable plan.

"To be an accountable plan, your employer's [moving expense] reimbursement arrangement must require you to meet all three of the following rules.
  • Your expenses must have a business connection – that is, you must have paid or incurred deductible expenses while performing services as an employee of your employer. Two examples of this are the reasonable expenses of moving your possessions from your former home to your new home, and traveling from your former home to your new home.
  • You must adequately account to your employer for these expenses within a reasonable period of time.
  • You must return any excess reimbursement or allowance within a reasonable period of time."

This comes from Publication 521 which readers should access for more information on moving expenses.


Popular posts from this blog

Review: Form 1099 Payments to 501(c)(3) Organizations


A church rented space from another church last year. Should it request a completed Form W-9 and issue Form 1099-MISC?


We have written similar blog posts on this topic in the past (listed below), but we figured it was a good time for a review. 

Payments from one 501(c)(3) organization to another 501(c)(3) organization are not subject to Form 1099-MISC reporting. The 2015 Instructions for Form 1099-MISC state that "payments to a tax-exempt organization" are exempt from reporting a Form 1099-MISC. 

The following are typical examples of payments of $600 or more by a church which are subject to reporting a Form 1099-MISC:
Rent paid to an individual (non-corporation)Payments for services rendered by individuals who are not employees (e.g. janitorial service, facilities, snow removal, guest speakers)Support sent directly to missionariesHere are some similar blog posts that we have written in the past:

Form 1099 for Payments to Other Ministries
Form 1099 for Non-profit?

Gifts Paid Out of Church Funds: Form 1099-MISC Requirements

 A church gave a wedding gift of $1000 to a couple who are church members. No goods or services were provided by the couple in exchange for the gift.  Is a Form 1099-MISC required? 
Answer: In the following answer, we assume that the couple are not employees of the church from whom the gift could not be viewed as compensation for their services. Also, the amount seems to be small enough to avoid any concerns of "private inurement."

Accordingly, no Form 1099-MISC is required. According to the 2017 IRS Instructions for Form 1099-MISC a Form 1099-MISC is only required for payment of goods or services. The requirements are as follows:
"File Form 1099-MISC, Miscellaneous Income, for each person to whom you have paid during the year:  At least $10 in royalties (see the instructions for box 2) or broker payments in lieu of dividends or tax-exempt interest (see the instructions for box 8);  At least $600 in:  1. Rents (box 1);  2. Services performed by someone who is not your …

Housing Allowance and Form 1099-MISC Reporting


A church provides its minister a housing allowance, but for other purposes it believes that it must report the full amount of compensation (including the non-taxable housing allowance portion) on Form 1099-MISC (in order to demonstrate the full earnings of the minister). If the church reports his compensation,including the housing allowance, on Form 1099-MISC as taxable income, will he be able to deduct his housing expenses somewhere else on the Form 1040?


This questions brings up a couple of issues. First, most ministers are properly classified as employees who receive Form W-2, not as independent contractors who receive Form 1099-MISC. On Form W-2, Box 1 for taxable compensation is reduced reflecting the church's designation of a portion of his pay as non-taxable. Then in Box 14, it typically reports as a memorandum item his additional non-taxable, housing allowance compensation. In the situation addressed in the question, this Form W-2 reporting may or may not a…