The Changing World of Church Planting

New Church Starts and

the Government

What does the CA Employment Development Department require of Church Starts?

• Per the EDD http://www.edd.ca.gov/pdf_pub_ctr/de231ee.pdf

• Employees of a church or convention or association of churches or an organization that operates primarily for religious purposes and is operated, supervised, controlled, or principally

What does the CA Employment Development Department require of Church Starts?

• supported by a church or convention or association of churches are not subject to UI, ETT, and SDI but are subject to PIT withholding.

• (UI) Unemployment Insurance • (ETT) Employment Training Tax • (SDI) State Disability Insurance• (PIT) Personal Income Tax

withholding

What does the CA Employment Development Department require of Church Starts?

• Ministers who are duly ordained, commissioned, or licensed in the exercise of their ministry and members of a religious order in the exercise of duties required by such order are not subject to UI, ETT, SDI, or PIT withholding.

What Policies and Procedures are necessary at start up?• ■ the organization must be

organized and operated exclusively for religious, educational, scientific, or other charitable purposes,

• ■ net earnings may not inure to the benefit of any private individual or shareholder, ■ no substantial part of its activity may be attempting to influence legislation,

What Policies and Procedures are necessary at start up?• ■ the organization may not

intervene in political campaigns, and

• ■ the organization’s purposes and activities may not be illegal or violate fundamental public policy

What Policies and Procedures are necessary at start up?• Childcare Policy• Youth Ministry Policy• Marriage Act Policy• Personnel Policy• Building Rental Policy• www.yourchurchmatters.com

Does filing our federal exemption change if we want to do social ministry?• Churches that meet the

requirements of IRC section 501(c)(3) are automatically considered tax exempt and are not required to apply for and obtain recognition of tax-exempt status from the IRS

Does filing our federal exemption change if we want to do social ministry?• Recognition as an exempt

organization has benefits:−Members know contributions are

tax exempt−Churches are eligible for grants

• Group Exemption or Individual church recognition with IRS form 1023

Does filing our federal exemption change if we want to do social ministry?• Welfare Exemption• http://www.irs.gov/Charities-&-

Non-Profits/Other-Non-Profits/Life-Cycle-of-a-Social-Welfare-Organization

• Form 1023• http://www.irs.gov/pub/irs-pdf/f1023.pdf

• How the IRS sees a church• http://www.irs.gov/pub/irs-pdf/p1828.pdf

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(559) 256-0858 direct line(559) 287-7840 cell phonerwiltrout@csbc.com

Rod WiltroutChurch Finance Specialist

www.csbc.com/financialmatters

Questions?