Monday, March 25, 2019

ECFA Joins Coalition in Call for Full Repeal of Nonprofit Parking Tax

In a letter dated March 1, 2019, ECFA joined a coalition of religious nonprofit organizations renewing the appeal to Congress to fully repeal section 512(a)(7) of the Tax Cuts and Jobs Act which places a burdensome tax on churches and nonprofits for the parking and transit benefits provided to their employees.

Drafted by the Ethics & Religious Liberty Commission of the Southern Baptist Convention and co-signed by a number of organizations of wide ecumenical scope, the letter seeks a swift response from Congress as churches and nonprofits face the task of filing the necessary 2018 documents to pay the tax.

The letter is addressed to Chairman Richard Neal and Ranking Member Kevin Brady of the House Ways and Means Committee, and marks the continuation of a campaign to repeal 512(a)(7), largely spearheaded by ECFA, which began in early 2018 shortly after the implications of the little known provision were discovered.

The letter acknowledges that while recent guidance from the Treasury Department on how to calculate the tax has “offered some relief,” the administrative burden on churches and nonprofits continues, and the tax will result in these organizations being “forced to shift resources from serving their charitable mission to dealing with paying this burdensome federal tax.”

Therefore, the coalition calls for a full repeal of section 512(a)(7) before the tax filing deadline for Form 990-T.

Read the Full Letter Calling for the Repeal of the Nonprofit Parking Tax Here.

Monday, March 18, 2019

Major Court Victory for the Ministers' Housing Allowance

Thousands of pastors and churches across America just scored a major victory in the latest court challenge to the ministers’ housing allowance.

More here from ECFA Executive Vice President John Van Drunen:




In its highly anticipated opinion on March 15, 2019 the U.S. Seventh Circuit Court of Appeals unanimously reversed a lower federal district court, which had ruled in late 2017 against the longstanding housing allowance for ministers. Instead, the appeals court likened the ministers’ housing allowance to other similar benefits in the tax code for work-related housing, finding the provision permissible under the First Amendment and well-established legal precedent.

The Freedom From Religion Foundation (FFRF), the group which brought this challenge to the housing allowance, did not indicate their intention to appeal the decision in an early press release reacting to the case.

Click here to read a more detailed breakdown of the court's opinion.

ECFA will continue to report any significant developments on the housing allowance in the News section at ECFA.church.

Monday, March 11, 2019

Ministers' Taxes Made Easy - 5 BIG Changes from Tax Reform


As the 2018 tax filing deadlines approach, ministers and churches face not only the yearly task of managing tax issues specific to clergy, but also the added challenge of understanding what changes have taken place as a result of the Tax Cuts and Jobs Act passed in late 2017.

ECFA recently tackled these challenges in a webinar entitled Ministers’ Taxes Made Easy. Highlights included discussion on 5 BIG Changes for Ministers as a result of tax reform.

BIG Change 1 – Doubling the Standard Deduction. The new tax law nearly doubles the standard deduction for 2018 and beyond to $12,000 for singles and $24,000 for married filing jointly. Given these much higher amounts, it is a sure thing that fewer ministers will itemize their deductions for 2018.

BIG Change 2 – Eliminating Personal Exemptions. The personal exemption of $4,050 for individual filers and dependents was repealed under tax reform.

BIG Change 3 – Disappearing Expense Deductions. Unreimbursed employee business expenses, tax return preparation costs, theft losses, and other miscellaneous write-offs were eliminated. Ministers should be sure their church-related expenses are reimbursed under an accountable plan. Unreimbursed expenses will have absolutely no tax value for 2018 and later years!

BIG Change 4 – Doubling the Child Tax Credit. The child tax credit is now doubled to $2,000 for each dependent under age 17. Additionally, up to $1,400 of the credit is refundable to lower-income taxpayers, and the credit is available to many more taxpayers due to an increased threshold of the phaseout.

BIG Change 5 – Eliminating Moving Benefits. Deductions for most job-related moves have been eliminated, and moving expenses paid or reimbursed by an employer are now taxable income. Church and ministry employers may now wish to help ministers offset some of the tax-related consequences of job-related moves.

The webinar also covered other relevant tax topics such as determining ministerial tax status, the minister’s housing exclusion, and understanding the differences between social security tax and income tax classifications.




Also check out the FREE companion eBook, Ministers’ Taxes Made Easy, a great resource for quick reference as you complete your tax filings.




Monday, March 4, 2019

Don’t Ignore Cracks in Your Board’s Foundation


Assessing Your Church Board in 6 Critical Areas

What happens to buildings with cracks in the foundation? No matter how magnificent the architecture, without the proper support, it’s just a matter of time before it all comes crashing down. The same can be true in our churches, especially our governance board.

We do well to focus on visible ingredients of growth and health—areas like strong Bible teaching, dynamic worship, and opportunities to engage and connect in community.

But do we overlook a foundational area—the role of the board in healthy, effective governance?

At the foundation, churches need effective boards that excel in six critical areas:

1. Spiritual atmosphere
2. Board-Pastor synergy
3. Intentionality
4. Faithful administration
5. Structure and style
6. Culture

This type of board won’t magically appear overnight. It takes time, intentionality, and equipping your board with the right resources to help them grow. That’s why I’m so excited about ChurchBoardScore™ – a free, online board self-assessment tool just launched by ECFA.

The quick assessment dives into six critical areas of board leadership outlined by governance experts Dan Busby and John Pearson in Lessons from the Church Boardroom: 40 Practical Insights for Exceptional Governance from ECFAPress.

Progress starts only when you are clear on where you are right now. You may discern that the board is underperforming in a certain area, but until the board has a laser focus on the problem, it will be difficult to take action.

That’s why the BoardScore™ assessment was created. But BoardScore™ doesn’t stop at simply pinpointing your board’s current strengths and weaknesses. Its most valuable features are the sound recommendations for improvement and links to related resources to help the board get started in areas that might need attention. Plus, we recommend retaking the assessment periodically to measure and celebrate the church’s progress.

We hope these free resources will bless and strengthen your church. Take the first step today towards better, more effective governance by accessing the free, confidential assessment at ECFA.church/Score. The investment in strengthening your church’s foundation will be well worth it!