Clergy

Social Security taxes or contributions are collected under the Federal Insurance Contributions Act (FICA) and the Self-Employment Contributions Act (SECA). Many people refer to contributions to Social Security as either FICA or SECA taxes. While FICA and SECA may sound similar, they are just two different ways for the government...

18 July, 2019

The Economic Mobility Act of 2019 would repeal section 512(a)(7), which imposes a 21 percent tax on expenses incurred by tax-exempt organizations for providing transportation benefits to their employees. The bill was approved by the House Ways and Means Committee on June 20. While there...

11 July, 2019

The Self-Employment Taxes that most members of the Clergy must pay quarterly are actually made up of two different taxes: Old-Age, Survivors and Disability Insurance (also known as “OASDI” or the more commonly used term “Social Security”) Medicare taxes   OASDI taxes are calculated as 12.4% of...

04 July, 2019

The Freedom from Religion Foundation, or FFRF, has decided not to pursue an additional challenge of the clergy housing allowance at the Supreme Court level. This means that clergy housing and parsonage allowance provisions will likely remain in place for tax year 2019 and beyond. For...

27 June, 2019

When a church hires an employee, one of the initial decisions that must be made is whether to treat the worker as clergy, non-clergy employee or contractor. This decision may seem insignificant, but it has huge implications when it comes to payroll. Ministers have what is...

20 June, 2019

The Affordable Care Act (also called ACA, federal health care reform or sometimes “Obamacare”) expands health coverage to millions of previously uninsured Americans and makes significant changes to health insurance practices nationwide. The Health Insurance Marketplace is an online resource for comparing different plans and benefits...

06 June, 2019

The IRS has ruled that clergy are self-employed for purposes of paying social security taxes. This means that they must pay both the employee and the employer share of social security tax under the Self-Employed Contribution Act (SECA). Churches are prohibited from paying FICA tax for...

30 May, 2019

Incorrectly classifying someone as an independent contractor instead of an employee can be very costly for the church based on IRS penalties. When in doubt, your best bet is to classify someone as an employee. If you really want to classify an individual as an independent...

23 May, 2019

A minister who wishes to be exempt from social security/Medicare tax must file a Form 4361 with the IRS for approval. Before your application can be approved, the IRS must verify that you are aware of the grounds for exemption and that you want the...

16 May, 2019

Churches normally hire an interim minister for the time between the departure of a pastor and the calling of a new pastor or a “sabbatical interim pastor” when a pastor is granted sabbatical leave. Full-time, interim ministers are usually paid on the same scale as...

09 May, 2019