Prior to 1968 a member of the clergy had to elect to be covered by
social security.If
you are duly ordained, commissioned, or licensed minister of a church, you are covered by
social security and Medicare under the self employment tax provisions for the services you
perform in your capacity as a minister unless you have requested and received
a tax exemption
from self employment tax. This is true whether you are an employee of your church or a
self employed person under the common law rules.
Unless an ordained member of the clergy objects to
social security benefits based upon
conscientious or religious grounds he/she is subject to self employment tax. To object you
must file Form 4361.
The
form
must be filed before the due date of your tax return for the second taxable year in
which you earned $400 or more from work as a member of the clergy. The
social security self employment tax exemption is
irrevocable.
Although you are considered a
self employed individual for social security purposes,
you may be considered an employee for other tax purposes.
Self employment tax does not apply to any post-retirement benefits or the rental value
of any parsonage or parsonage allowance.
Under these tax rules, you are considered an employee or a
self employed person depending
on all the facts and circumstances. Generally, you are an employee if your employer has
the legal right to control both what you do and how you do it, even if you have
considerable discretion and freedom of action.
If you are not considered an employee in performing your ministerial services, you will
figure taxable net earnings on Form 1040, Schedule
C.
Figure your self employment tax on
Form 1040, Schedule SE.
If you earn or receive
taxable income during the tax year that is not subject to
tax withholding, or if
you do not have enough income tax withheld, you may have to pay estimated tax.
