Church Employees or Independent Contractors?
In one form or another, this question has been asked literally hundreds of times in financial seminars, correspondence, and telephone conversations. The questions come as a response to the increasing responsibilities of churches and other employers for reporting employee compensation information to the IRS. Fortunately, the answer is fairly straightforward. How ever, it is frequently not the answer desired by the questioner. Who Are Employees? There are basically two types of employees defined by the Tax Code: statutory employees and common law employees. Statutory employees have specifically defined jobs that on the surface might appear to be self-employed positions were it not for the statutes that define the work as that of an employee. The common law employee is the category which affects local churches most often. A common law employee is generally anyone who performs services that can be controlled by the employer. That is, the employer has the legal right to control (even if ...