How to Prepare W-2s for Church Employees, Including Ministers

Churches need to report each employee's taxable income and withheld income taxes as well as Social Security and Medicare taxes on Form W-2, and furnish copies B, C, and 2 of the 2020 Form W-2 to each employee by February 1, 2021. Copy A should be submitted to the Social Security Administration (SSA) by February 1, 2021, along with Form W-3, Transmittal of Wage and Tax Statements. The deadline is the same whether you file electronically or use paper forms.

Note: If your employees give their consent, you can furnish Forms W-2 to your employees electronically. For details on furnishing W-2s in this format, see chapter 11 in my Church & Clergy Tax Guide.

Although W-2s are not difficult to prepare, there are some tips you should know.

First, be sure to add cents to all amounts. Make all dollar entries without a dollar sign and comma, but with a decimal point and cents. For example, $1,000 ...