November 2008

Great Commission Fund (GCF) Update
Total revenues for the four months ending October 31 equal $12,114,000, or 101.9 percent of the revenue budget of $11,886,000. GCF expenses have been held to 96.0 percent of the expense budget, resulting in a net expense from operations of $973,000 through four months, a favorable variance of $775,000 compared to a budgeted expense of $1,748,000. However, November GCF giving is projected at less than 85.0 percent of budget, which would result in YTD revenues through five months falling to approximately 98.3 percent of budget. The current fall-off in giving is of concern as the months of December and January represent the two largest giving months in the revenue budget.

At its October meeting, the Board of Directors approved a 3 percent increase for missionaries on home assignment and a limited cost-of-living adjustment for National Office workers effective November 1, 2008. The salary adjustment for National Office workers coincides with the increase in the share of health insurance premium paid by employees, effective January 1, 2009.

Please be in prayer that the people of the Alliance would continue to exhibit sacrificial giving in response to God’s provision during tough economic times.

2008 Year-End Offering
The 2008 Year-End Offering materials were mailed to your church in October. The promotional kit should be beneficial in engaging your church to support Alliance Great Commission Ministries. Enclosed in this kit are several resources that your church can use to encourage people to give a special year-end gift to the GCF. Also included is the 2008 Ministry Highlights, a colorful resource that contains an overview of Alliance ministries since 2007 and a sneak-peek into the future plans that are under way. For inquiries about the resources, contact Director for Communications Rick Hemphill at (719) 265-2175 or e-mail hemphillr@cmalliance.org.

Here is the Webpage link that you can use for additional information on the Year-End Offering:
www.cmalliance.org/give/yearend.jsp. To be included in December giving, your contribution must be received at the National Office by December 31.

IRA Rollover Provisions Approved by Congress
Congress has recently extended an IRA rollover provision for contributions completed by December 31, 2008. If you are over age 70½, you are allowed to rollover up to $100,000 from your traditional or Roth IRA without any additional taxes. All you need to do is contact your IRA custodian and request that an amount be transferred to The Christian and Missionary Alliance. If you would like more information, please contact Joseph Padilla at 1-888-689-6300 or e-mail padillaj@theorchard.org.

Christmas Gifts to Pastors and Staff
In most cases, financial gifts made by the church or congregation to pastors and/or staff should be considered taxable income, not tax-free gifts, and should be reported as income on the recipient’s W-2.

W-2 Reporting of Clergy Income
Clergy income is reported in Box 1 of the W-2 with all tax withholding reported in Box 2. Because clergy are not subject to FICA taxes, Boxes 3 through 8 should be left blank. The housing allowance should not be included in the amount reported in Box 1 but should be reported in Box 14 (Other). However, FICA taxes should be withheld and remitted for church employees that do not qualify as clergy.

Housing/Parsonage Allowance
Your church board should approve, in writing, a 2009 housing/parsonage allowance for your pastor(s) before the end of 2008. Legislation was passed in 2002 that limits the excludable amount of housing allowance for pastors who own their own homes to “not exceed the fair rental value of the home, including furnishings and appurtenances such as a garage, plus the cost of utilities.” We recommend that this housing allowance be approved as a continuing resolution so it will not expire if the board does not consider it the following year. An example follows:

The following resolution was duly adopted by the governance authority of [church name] at a regularly scheduled meeting held on [date], a quorum being present: It is hereby resolved that a housing (or parsonage) allowance be designated for Rev. [pastor’s name] in the amount of $[amount] for the year 2009 and for all future years unless changed by specific action of the governance authority.

We recommend that this housing allowance be reported in Box 14 on your pastor’s W-2 to provide a permanent record of the amount and to provide support for the resolution adopted by your church.

Did You Know?
Not all church employees are exempt from minimum wage and overtime pay. Like other entities, churches are subject to the Fair Labors Standard Act (FLSA), which establishes standards for determining if an employee is either exempt or non-exempt from minimum wage rules and overtime pay.

1. employees (other than those performing outside sales duties) cannot be classified as “exempt” unless they receive a guaranteed minimum weekly salary and perform certain executive, administrative or professional duties
2. $455.00 per week is the minimum weekly salary required for exempt employee status
3. exempt or non-exempt status of an employee must be determined based on the duties the employee is required to perform on a day-to-day basis
4. administrative employee’s primary duty must include “the exercise of discretion and independent judgment with respect to matters of significance”

These are general observations and not a comprehensive explanation. The above should not be relied on without further consultation with a legal professional. If you have any questions related to the above, please contact Tim Cummings at 719-265-2068 or cummingst@cmalliance.org. Tim is the General Counsel/Assistant Corporate Secretary in the National Office.

Standard Mileage Rates
Effective January 1, 2009, the Internal Revenue Service (IRS) has decreased the standard mileage rate to 55 cents per mile, a decrease from 58.5 cents per mile for July through December 2008. This new rate may be used to reimburse employees tax free for mileage driven in their personal automobiles for 2009. This rate may also be used to value personal mileage in church-provided vehicles with a fair market value of $15,000 or less for inclusion on the employees W-2 as taxable income. The new rate for medical or moving expenses is 24 cents. The rate for providing services for charitable organizations is set by statute, not the IRS, and remains at 14 cents a mile.

Tax Guide for Churches and Religious Organizations
The IRS offers a quick reference guide of federal tax law and procedures for churches and religious organizations to help them voluntarily comply with tax rules. It can be accessed on the IRS Web site: www.irs.gov/pub/irs-pdf/p1828.pdf.

Office of Employee Benefits
C&MA Retirement Plan. Please watch for a mailing arriving at your church soon discussing changes to 403(b) Retirement Plan regulations, effective January 1, 2009. One of the new regulations requires your church to create a plan document if you are actively contributing to more than one vendor. Consider using the C&MA Retirement Plan as your only vendor! It is a “church plan” as recognized by the Internal Revenue Service, allowing official workers upon receiving retirement payments to offset the income against housing costs which will save on income taxes.

C&MA Health Plan. The premium rate increase for 2009 is only 5% for all plans. Over the past six years the premium rate increase has averaged 2.5 percent per year. There have been a number of improvements to the plans approved by the Benefit Board for 2009. Please be sure to check out the 2009 Plan Summary booklet or check the website at benefits.cmalliance.org for more information. Please remind those that are participating in our plan that they have until December 10, 2008, to make any plan changes for 2009.

Please consider joining the C&MA Health Plan if your church is in a participating district. For more information, call Alliance Benefits at 800-700-2651, ext. 2. If your church is in a nonparticipating district and you would like to join the C&MA Plan, let your district superintendent know your desires. If 50 percent of the churches within a district agree to join the plan, the district will become a participating district.

C&MA Fellowship Fund. Please do not forget to mail your church’s 2008 Fellowship Fund contribution by December 31, 2008. The amount of contribution is 0.7 percent of 2007 church income. Payments may be made with your December GCF contribution. Just indicate that the amount is for the “FF.” The payment for 2009 will be based on 0.7 percent of 2008 church income. For more information call the benefit office at 800-700-2651, ext. 3.

The Alliance Development Fund (ADF)
One aspect of your work is managing cash and investments. As part of this stewardship role, it is very important to place your funds in secure places and earn the best possible return. The Alliance Development Fund (ADF) would be pleased to assist you with these responsibilities and provide the added benefit of helping to build churches where lives are transformed.

ADF is a great place for church savings and investments that you don’t need right away (such as operating reserve funds, building funds, and restricted gifts). The funds can be placed for a variety of time periods with commensurate rates of interest from our popular Church Agreement (savings) account, currently paying 2.5 percent, to investment certificate accounts ranging from 3.5 percent to 4.10 percent for six-month to five-year terms.

At ADF, your investments, along with thousands of others, provide a pool of funds made available for Alliance ministry loans. Through ADF, ministries receive funds for purchasing strategic properties. You as an investor receive not only a secure investment with a very competitive rate but also the satisfaction of knowing that your church’s funds are helping change lives.

Please contact us (www.adf-inc.com/contact.php) if you are interested in investing, need additional information, or if we can serve you in any way.

Download the complete letter from ADF to church treasurers»

Thank You
Thank you for your valuable ministry at your church. If you need any other help, please e-mail me at baldesk@cmalliance.org.

Gratefully,

Ken Baldes
Vice President for Operations/Treasurer and COO