My husband is a pastor. Do I have to report as income the money the church gives him to buy health insurance? Is it included in box 1 on the W2?

[BKG2]

We are on the Marketplace because the church is too small to get group insurance. We understand that the money he is given to pay for that is taxable income. Is that correct? If so, would the bookkeeper add that to box 1 on his W2 or is it placed elsewhere? He has a 4361 exemption so none of this goes towards that.

[MiriamF · Accepted solution]

The money your husband is being paid for his health insurance should be included in box 1 of his W-2.

Contact the person who prepared your W-2 to confirm that this was done. If not, they should prepare an amended W-2.

[Opus 17]

The church can do one of two things.  It can buy a policy for your husband directly from church funds (with or without an employee contribution).  This is basically a group policy like most employers offer, just with a group size of one (if its a small church with one pastor.)

Or, they can increase ("gross up") his salary and allow him to pick his own plan on the open market.  In this case the money is treated the same as a raise and must be included in taxable wages.

The church is not allowed to reimburse his premiums tax-free or off the books.  This can subject the church to a fine of $100 per day for doing in.