We have several members of the clergy who are employed at our University and we are clear on their income being exempt from SS & Medicare taxes. But what about the income they do receive in salary each pay period, should we have their income populating Box 1 and Box 16 of their W2? One of these Sister's is the Law Librarian making approx.
74K per year and approx. $2500 is tied back to the University. I am getting conflicting information from the IRS about the W2 and what should have been reported in Box 1.
Thanks for any help

I would keep pounding on the IRS door rather than ask for our advice. The IRS is the final word on this. I worked at a Catholic University and never had a clue that the sisters income was exempt from medicare.