header detail 2
AccelUS
  • Home
  • Our Services
    • Business Services & Outsourcing
    • Audit & Assurance
    • Payroll, HR & Global Mobility
    • Employee Benefit Plans
  • About Us
  • Career
  • Contact
  • Blog
menu
close

Need Help?

Talk to an Expert

+91 92300 33070
AccelUS
  • Home
  • Our Services
    • Business Services & Outsourcing
    • Audit & Assurance
    • Payroll, HR & Global Mobility
    • Employee Benefit Plans
  • About Us
  • Career
  • Contact
  • Blog

Need Help?

Talk to an Expert

+91 92300 33070

Understanding IRC Section 414(e): The Definition of a Church

Home Understanding IRC Section 414(e): The Definition of a Church
Understanding IRC Section 414(e) The Definition of a Church
  • January 28, 2025
  • 0 Com
Business

What is a Church Plan?

A church plan is an employee benefit plan specifically created for the employees (and their beneficiaries) of:

  • A church or a convention or association of churches.
  • Organizations that are controlled by or associated with a church.

This definition extends to entities such as religious hospitals, schools, charities, and other organizations with a formal association with a church. The key criterion is that the organization must share common religious bonds and convictions with the church.

Understanding IRC Section 414(e) The Definition of a Church without text

IRC Section 414(e) – The Church Plan Exemption

Church plans are noteworthy for their exemption from certain provisions of the Employee Retirement Income Security Act of 1974 (ERISA). While ERISA imposes stringent reporting, disclosure, and fiduciary requirements on most employee benefit plans, church plans are generally exempt unless the plan administrator voluntarily elects to be covered under ERISA by filing a formal election.

This exemption reflects a broader policy of limiting governmental oversight in the internal affairs of religious organizations, recognizing their unique relationship with their employees.

IRC Section 414(e) Special Rules and Considerations

IRC Section 414(e) also includes specific rules and provisions:

  1. Organizations Covered:
    • Church plans may include employees of organizations such as parochial schools, church-affiliated charities, and other entities closely associated with a church.
  2. Non-Clergy Employees:
    • Church plans are not limited to clergy members. Plans covering lay employees (non-clergy) also qualify as church plans, provided they meet the necessary criteria.
  3. Funding Requirements:
    • Unlike most ERISA plans, church plans are not required to adhere to ERISA’s minimum funding standards. However, they must still comply with other relevant tax code provisions to maintain their qualified status.
  4. Plan Administration:
    • Church plans often delegate administrative duties to committees or boards closely tied to the church, ensuring the plan’s operations align with religious principles.

Audit and Compliance Considerations

For organizations conducting audits of employee benefit plans, it’s critical to:

  • Verify Plan Qualification: Ensure the plan meets the definition of a church plan under IRC Section 414(e).
  • Review Affiliation Documentation: Confirm the organization’s control or association with a church through governing documents, organizational structures, or shared religious practices.
  • Examine ERISA Exemption: Check if the plan has elected to waive its exemption and adhere to ERISA standards.

IRC Section 414(e) – Why Does This Matter?

Understanding the intricacies of church plans is essential for compliance, particularly when dealing with tax benefits, regulatory requirements, and employee rights. For religious organizations, it’s an opportunity to structure benefits that align with their unique missions while navigating a specialized regulatory landscape.

Contact Accelus for more!


LEAVE A COMMENT Cancel reply
Please Enter Your Comments *

CATEGORIES
  • Business
  • Uncategorized

More CategoriesShow Less
RECENT BLOG
  • Key Updates on Form 6765: What You Need to Know
    Key Updates on Form 6765: What You Need to Know

    0 Comment

  • Maximize Your Business Savings with Employment Allowance
    Maximize Your Business Savings with Employment Allowance

    0 Comment

  • A Guide to National Insurance for Company Directors
    A Guide to National Insurance for Company Directors

    0 Comment

OUR TECH EXPERTISE
Accounting & Payroll Platforms We Work On
1
2
3
4
image
image
image
image
An initiative by TMG. (Taxmantra Global)

Join us in shaping a tomorrow where outsourcing with AccelUS isn’t just a service; it’s a strategic partnership propelling your firm toward unparalleled success on the global stage.

[email protected]

ABOUT US
  • About
Services
  • Business Services & Outsourcing
  • Audit & Assurance
  • Payroll, HR & Global Mobility
  • Employee Benefit Plans
Quick Link
  • About Us
  • Career
  • Contact
Location

Bengaluru
Kolkata
Mumbai
Singapore
Dubai
New Jersey
EU
UK
Los Angeles
Santa Clara
Atlanta
Washington

Bengaluru | Kolkata | MumbaiSingapore | Dubai | New JerseySanta Clara | UK | EU Los Angeles | Atlanta | Washington</a
An initiative by TMG. (Taxmantra Global)

Join us in shaping a tomorrow where outsourcing with AccelUS isn’t just a service; it’s a strategic partnership propelling your firm toward unparalleled success on the global stage.

[email protected]
ABOUT US
  • About
Services
  • Business Services & Outsourcing
  • Audit & Assurance
  • Payroll, HR & Global Mobility
  • Employee Benefit Plans
Quick Link
  • About Us
  • Career
  • Contact
Location

Bengaluru Kolkata Mumbai Dubai

Los Angeles New Jersey Atlanta Singapore

UK

Santa Clara

EU

Washington

  • Copyright @ AccelUS
  • Privacy
  • Terms and Conditions
  • Privacy
  • Terms and Conditions
Facebook Linkedin Twitter Youtube
  • PRIVACY
  • TERMS & CONDITIONS
  • BLOG
  • Copyright@AccelUS

Thank you for reaching out to us.
Our team has received your message.
One of our representatives will get back to you as soon as possible to address your inquiry or request.
In the meantime, if you have any urgent matters or additional details to share, please feel free to reply to this email.

Popup

    WhatsApp us