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Mark Taylor
Mark Taylor, Certified Public Accountant (CPA)
Category: Finance
Satisfied Customers: 1650
Experience:  Certified Public Accountant
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As a church, are we exempt from the following taxes: - CA

Customer Question

As a church, are we exempt from the following taxes: - CA SDI (employee)
- CA ETT (employer)
- CA SUI (employer)
- FUTA (employer)
JA: The Accountant will know how to help. Please tell me more, so we can help you best.
Customer: We are in california
JA: Is there anything else important you think the Accountant should know?
Customer: no we are a 501c3 by the IRS determination letter.. if that helps
Submitted: 4 months ago.
Category: Finance
Expert:  Mark Taylor replied 4 months ago.

Hi, my name is Mark. I will be happy to help you with your questions. Please give me a moment to prepare your response.

Customer: replied 4 months ago.
Thank you
Expert:  Mark Taylor replied 4 months ago.

A non profit (501c3 designation) would be exempt from FUTA but not CA ETT or CA SUI. The state of California does give you different options on how to pay this. One option is the calculate and pay these amounts like any other taxpayer. The other option is a reimbursement method. Below is information from California's web site. Here is the link to the page. http://www.taxes.ca.gov/exemptbus.shtml

State Payroll Taxes (Employment Development Department)

Nonprofit organizations* are subject to Unemployment Insurance (UI), Employment Training Tax (ETT), State Disability Insurance (SDI)** and state Personal Income Tax (PIT) withholding.

However, nonprofit entities that have an exemption under Section 501(c)(3) of the Internal Revenue Code (IRC) have a choice in the method of financing their unemployment costs. A nonprofit entity may elect to:

  • • Pay the same UI taxes under the same method as commercial employers (experience rating method).
  • or
  • • Reimburse the state for the full cost of all UI benefits paid to their former employees (reimbursable method).
Customer: replied 4 months ago.
this is for churches too? not just 501c3?
Expert:  Mark Taylor replied 4 months ago.

I do not believe that there is an exception for churches. Please give me a moment and I will look into that for you.

Customer: replied 4 months ago.
thank you
Expert:  Mark Taylor replied 4 months ago.

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 supported by a church or convention or association of churches are not subject to UI, ETT, and SDI but are subject to PIT withholding. 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. http://www.edd.ca.gov/pdf_pub_ctr/de231ee.pdf

Expert:  Mark Taylor replied 4 months ago.

It looks like churches are exempt from SUI and ETT.

Customer: replied 4 months ago.
Great! So churches are exempt:
- CA SDI (employee)
- CA ETT (employer)
- CA SUI (employer)
- FUTA (employer)?
Expert:  Mark Taylor replied 4 months ago.

Yes, that is correct.

Expert:  Mark Taylor replied 4 months ago.

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