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?

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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.

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