Clergy are dual-status employees and are not eligible to have FICA taxes withheld from their church compensation. In lieu of FICA taxes, clergy are subject to self-employment tax (SECA) which is calculated and paid on their tax return. Reimbursements from an employer of SECA are taxable as wages. Note, however, that even though clergy pay SECA tax, most ministers are considered employees and should receive a Federal Form W-2 from their church.
Clergy Financial Resources serves as a resource for clients to help analyze the complexity of clergy tax law, church payroll & HR issues. Our professionals are committed to helping clients stay informed about tax news, developments and trends in various specialty areas.
This article is intended to provide readers with guidance in tax matters. The article does not constitute, and should not be treated as professional advice regarding the use of any particular tax technique. Every effort has been made to assure the accuracy of the information. Clergy Financial Resources and the author do not assume responsibility for any individual’s reliance upon the information provided in the article. Readers should independently verify all information before applying it to a particular fact situation, and should independently determine the impact of any particular tax planning technique. If you are seeking legal advice, you are encouraged to consult an attorney.
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