Are 403(b) contributions exempt from SE taxes?

by Susan Goldcamp
(Reading, PA)

I have a pastor client who insists that the 403(b) contributions reported on her W2 are not subject to SE taxes. The IRS pub. says it's exempt from gross income but does not, anywhere, seem to mention SE taxes. I tend to think they should be included with SE income. What do you say?

Comments for Are 403(b) contributions exempt from SE taxes?

Click here to add your own comments

Sep 25, 2014
403(b) exempt from SE taxes?
by: Lewis in NC

I have read that a minister is
not subject to the 15.3 percent federal self-employment tax on amounts deferred into 403(b)
accounts (source: IRS Revenue Rulings 68-395 and 78-6). This is also true of any amount
that his/her employer contributes over-and-above to the minister’s own elective deferral.

Click here to add your own comments

Join in and write your own page! It's easy to do. How? Simply click here to return to Fringe Benefits.

If you want to DIY your payroll, I highly recommend you look at using Gusto! It is very user friendly and their support is awesome! Plus they know how to set up and maintain payrolls for churches and nonprofit organizations.

Note: I am a "partner" of Gusto, but as I have told you before ... I never recommend anything that we or our clients have not tried and love =)

Share this page:
Enjoy this page? Please pay it forward. Here's how...

Would you prefer to share this page with others by linking to it?

  1. Click on the HTML link code below.
  2. Copy and paste it, adding a note of your own, into your blog, a Web page, forums, a blog comment, your Facebook account, or anywhere that someone would find this page valuable.