Report from Administration & Finance Vision Team
Are Your Employment Papers in Order?

This month the Administration & Finance Vision Team would like to provide some church-related tips and reminders regarding required employment papers.

For every employee, the church should have in a secure location the following documents: IRS Federal “Employee’s Withholding Allowance Certificate” (W-4) and a state withholding certificate, if required. For Arkansas, the church needs “State of Arkansas Employee’s Withholding Exemption Certificate” (AR4EC) and/or “State of Arkansas Employee’s Special Withholding Exemption Certificate” (AR4ECSP). For Kansas, the church needs “Kansas Employee’s Withholding Allowance Certificate” (K-4). Oklahoma does not require a special state form, but uses the W-4 for the state withholding basis unless they are notified differently by an employee.

Each employer is also required to have on file for “every” employee “Form I-9,
Employment Eligibility Verification” required by the Department of Homeland Security. This document is not mailed to any entity, but must be filed in a secure location and readily available should an inspection occur. The liability for the I-9 falls on the employer. The instructions for this form read, “All employees (citizens and noncitizens) hired after November 6, 1986, and working in the United States must complete Form I-9.”

Often employers forget this vital employment document, or believe that it is an old form that is no longer viable. But, BEWARE! The instructions currently read, “Employers are still responsible for completing and retaining Form I-9.”

Form I-9 requires not only the signature of the employee verifying employee information and work status provided in Section 1 “prior” to the onset of employment, but also requires the employer’s review, verification, and certification in Section 2. An employer needs to certify and complete this form only once, unless an employee has a work authorization expiration date in Section 1. In which case, the employer will need to complete Section 3, Updating and Reverification, on or near the expiration date in Section 1.

The financial officer of your church, at the beginning of each year, should provide each paid individual the opportunity to update or revise his/her federal and state withholding exemption certificates. The liability for the withholding exemption certificates falls on the employee.

IRS recommends in Form W-4 instruction that each employee “Consider completing a new Form W-4 each year and when your personal or financial situation changes.” Employees whose income tax returns result in a significant payment to the IRS could consider reducing the number of exemptions or adding an additional amount for withholding. Change in family or marital status also requires a replacement W-4 within ten (10) days of such change.

Employers must put into effect any replacement Form W-4 no later than the start of the first payroll period ending on or after the 30th day after receipt of the replacement form. Naturally, employers can put the replacement exemption certificate into effect sooner.

Ordained ministers need not complete a Form W-4 unless they enter into a voluntary withholding agreement with the church, requesting the church withhold state and federal income tax. The church should, however, require ordained ministers to complete IRS Form W-9, “Request for Taxpayer Identification Number and Certification.” This form provides vital information for the year-end W-2 for ministers and should be kept in a secure location.

Employment forms mentioned in this article are being made available on the Region website or may be requested from the Financial Administrator 785-272-7622.

We hope your new year has been blessed so far and you find the above information helpful.


WEBSITE LINKS:

http://www.irs.gov

http://www.dfa.arkansas.gov

http://www.ksrevenue.org

http://www.tax.ok.gov

http://www.uscis.gov/i-9