• The church must pay at least half the total cost of insurance premiums under a qualifying plan and have fewer than 25 full-time equivalent (FTE) employees. The average annual wage among employees must be less than $50,000.
• The credit is limited to the total of income and Medicare taxes withheld from employees’ pay, plus the employer’s share of Medicare tax.
• Wages paid to an ordained minister are not counted in computing the average annual wages, as they are not subject to FICA tax withholding. However, a minister is counted as an employee in determining the number of FTE employees.
• Contributions to employees’ Health Savings Accounts or Flexible Spending Accounts do not count toward the credit.