Does your minister have a Continuing Education line item as part of their compensation package? One church called recently and wondered how they could ensure that their minister used the funds each year for the primary purpose. Because the line item was part of the minister’s gross compensation and not an accountable expense reimbursement, the church couldn’t say much except to encourage the minister to use the funds for continuing education the next year.
One option to this arrangement is to set up a Continuing Education Fund as an accountable expense reimbursement line item in the general budget. For example, if your church set up a Continuing Education fund of $2,000 in the annual budget, the minister could submit receipts from books, conferences, and seminars and be reimbursed for the expenses.
The accountable expense arrangement can be better for the minister and the church. First, it would not be considered compensation for the minister and second, your minister would be accountable to actively use the funds for the intended purpose.
Accountable Expense Reimbursement Plans can work well for other expenses as well including mileage. US income tax regulations provide that these arrangements must meet the requirements of business connection, substantiation, and return of excess payments in order to be considered a reimbursement. Also, the regulations require that receipts be received in a timely manner, usually within 60 days.
Comments
Sherri,
Once again a very useful suggestion. We need to be careful to encourage pastors to do continuing education, while at the same time not be strapped financially to do so. The costs, as you indicate so gently, should not be part of the taxable compensation package. Accountability will encourage both pastor and those in the congregation responsible. Thanks for your good encouragement.
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