Monthly requirements
If your church reported withheld taxes of $50,000 or less during the most recent lookback period (for 2023 the lookback period is July 1, 2021, through June 30, 2022), then withheld payroll taxes are deposited monthly.
Monthly deposits are due by the 15th of the following month. Note, however, that if withheld taxes are less than $2,500 at the end of any calendar quarter (March 31, June 30, September 30, or December 31), the church need not deposit the taxes.
Tip: The 2023 Church & Clergy Tax Guide is available—order a print copy today (while supplies last) or download the .pdf version now.
Instead, it can pay the total withheld taxes directly to the IRS with its quarterly Form 941. Withheld taxes include federal income taxes withheld from employee wages, the employee’s share of Social Security and Medicare taxes, and the employer’s share of Social Security and Medicare taxes.
Semiweekly requirements
If your church reported withheld taxes of more than $50,000 during the most recent lookback period (for 2023 the lookback period is July 1, 2021, through June 30, 2022), then the withheld payroll taxes are deposited semiweekly with a bank.
This means that for paydays falling on Wednesday, Thursday, or Friday, the payroll taxes must be deposited on or by the following Wednesday. For all other paydays, the payroll taxes must be deposited on the Friday following the payday.
Note further that large employers having withheld taxes of $100,000 or more at the end of any day must deposit the taxes by the next banking day. The deposit days are based on the timing of the employer’s payroll. Withheld taxes include federal income taxes withheld from employee wages, the employee’s share of Social Security and Medicare taxes (7.65 percent of wages), and the employer’s share of Social Security and Medicare taxes (an additional 7.65 percent of employee wages).
April 18, 2023: Tax returns, amended returns, extension, exemption from Social Security, and quarterly payment
Individual tax returns
Federal income tax and self-employment tax returns by individuals for calendar year 2022 are due by this date.
Extension for filing tax returns
Filing Form 4868 by this date gives taxpayers until October 15, 2023, to file their 2022 tax return but does not grant an extension of time to pay taxes due. Taxpayers should pay their federal income tax due by April 18, 2023, to avoid interest and penalties.
Exemption from Social Security coverage
April 18, 2023, is the last day to file an exemption from Social Security coverage (Form 4361) for most eligible clergy who began performing ministerial services in 2021 (deadline extended if applicant obtains an extension of time to file Form 1040). This is filed by individuals who are opposed on the basis of religious considerations to the acceptance of benefits under the Social Security program or another public insurance system.
For ministers who are eligible to opt-out of Social Security, CPA Elaine Sommerville recommends they should first answer these six questions.
Quarterly estimated tax payments for certain employees and churches
Ministers who have not elected voluntary withholding and self-employed workers must file their first quarterly estimated federal tax payment for 2023 by April 18, 2023 (a similar rule applies in many states to payments of estimated state taxes).
Nonminister employees of churches that filed a timely Form 8274 (waiving the church’s obligation to withhold and pay Social Security and Medicare taxes) are treated as self-employed for Social Security purposes, and are subject to the estimated tax deadlines with respect to their self-employment (Social Security) taxes unless they ask their employing church to withhold an additional amount of income taxes from each paycheck (use a new Form W-4 to make this request) that will be sufficient to cover self-employment taxes.
A church must make quarterly estimated tax payments if it expects an unrelated business income tax liability for the year to be $500 or more. Use IRS Form 990-W to figure your estimated taxes. Quarterly estimated tax payments of one-fourth of the total tax liability are due by April 15, June 15, September 15, and December 15, 2023, for churches on a calendar-year basis. Deposit quarterly tax payments electronically using EFTPS.
Note: If a date listed for filing a return or making a tax payment falls on a Saturday, Sunday, or legal holiday (either national or statewide in a state where the return is required to be filed), the return or tax payment is due on the following business day.
Note: You must use electronic funds transfer to make all federal employment tax deposits. This is generally done using the Electronic Federal Tax Payment System, a free service provided by the U.S. Department of Treasury. If you don’t wish to use EFTPS, you can arrange for your tax professional, financial institution, or payroll service to make deposits on your behalf. Failure to make a timely deposit may subject you to a 10-percent penalty
