The Pretax Benefits Advantage

Did you know you may actually be saving money on taxes by making your personal contributions for your health benefits from The Texas Annual Conference of The United Methodist Church (TAC)?

It’s true. Section 125 of the Internal Revenue Code allows employees to use pretax contributions to pay for benefits. That’s why many TAC churches offer pretax contributions for medical, dental and vision plans.

What’s the pretax advantage?

Your contributions are deducted from your pay before taxes on your pay are calculated. That reduces your federal and Social Security tax liability. Since you don’t pay taxes on the portion of your pay you contribute for benefits, your take-home pay is greater than it would be by paying for your benefits with after-tax contributions.

Some considerations

  • Most TAC churches offer pretax contributions, but not all. You should check with your salary-paying unit to make sure your church participates. If you need forms, contact the TAC Benefits Office.
  • The plan year for benefits runs from January 1 through December 31 each year. You must submit an enrollment form to participate prior to the start of the plan year.
  • Once you choose your pretax contribution amount for the year, you cannot change or suspend your pretax contributions during the plan year unless you have a qualifying change in family status (like marriage, divorce, birth of a child, etc.).
  • Upon request, your church will provide you with a copy of the summary plan description containing all the details about how the pretax contributions work.

Church administrators

Contact the Benefits Office at 713-533-3702 or 1-800-606-0350 or Click to email.


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