File Form 4361 by the date your income tax return is due, including extensions, for the second tax year in which you have net earnings from self-employment of at least $400. This rule applies if any part of your net earnings for each of the 2 years came from your services. We also suggest to contact the Social Security office to determine the impact to your future benefits.
To claim the exemption from SE tax, you must meet all of the following conditions.
• You file Form 4361
• You are conscientiously opposed to public insurance because of your individual religious considerations (not because of your general conscience), or you are opposed because of the principles of your religious denomination.
• You cannot file for economic reasons.
• You establish that the organization that ordained, commissioned, or licensed you, or your religious order, is a tax-exempt religious organization.
• You establish that the organization is a church or a convention or association of churches.
After you receive your approved Form 4361, you need to keep a copy with your important records. It is extremely difficult to get a copy from the IRS if it is lost. Once the exemption is approved, it is irrevocable.
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.
For more information or if you need additional assistance, please use the contact information below.
Clergy Financial Resources
11214 86th Avenue N.
Maple Grove, MN 55369
Tel: (763) 425-8778
Fax: (888) 876-5101