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friendshipinbrah
January 6, 2020
Question

Does anyone work with small churches? We have a small church and have not paid unemployment insurance or worker's comp insurance. How do I exempt this from our payroll?

  • January 6, 2020
  • 1 reply
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1 reply

MaryLandT
MaryLandT
January 7, 2020

Hi there, friendshipinbrah,

 

I'm here to help set up your company in QuickBooks Online.

 

As nonprofit organizations, most churches are exempt from Federal Unemployment Tax (FUTA). You need to select 501(c)(3) to indicate no FUTA tax liability. This will also prevent prompting for the annual 940 form.

 

Here's how:

  1. Click the Gear icon at the right top, then select Payroll Settings.
  2. Select General Tax Information under Taxes.
  3. Choose 501c3 Corp from the Company Type drop-down, then click OK.

To exempt an employee from paying worker's comp:

  1. Select Workers from the left pane, then Employees.
  2. Click the name of the employee you want to exempt.
  3. Select Edit employee.
  4. Go to the What's [Employee's name] comp info section.
  5. Select exempt from worker's comp, then click Done.

The Clergy and church payroll article will provide more information you need to complete QuickBooks Online Payroll.

 

Keep me posted if you have follow-up questions, and I'm happy to help you out.

Al Borland
Al Borland
February 16, 2022

@MaryLandT How do I change the company type to 501c3 in Quickbooks Desktop? Thanks

MariaSoledadG
MariaSoledadG
February 17, 2022

Let's make sure you'll be able to change to non-profit, Al Borland.

 

In QuickBooks Desktop, you can only choose the company type after setting up the company file. For now, the Exempt Organization option is the only available option for a non-profit organization. You'll want to select from the Income Tax Formed Used section the Form 990 Exempt Organization type. To do this, follow the steps below:

  1. Go to the Company menu and select My Company.
  2. Click the Pencil icon and press Report Information.
  3. Tap the Income Tax Form Used and select the correct filing form.
  4. Select OK to save it.

Apart from this, you may want to check out these articles so you'll be guided about QuickBooks: Get Started With QuickBooks Desktop.

 

Let me know if you have any concerns about changing your company type. I'll always be right here to help.

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