Clergy Tax Questions

Question regarding clergy tax:

My best friend is a priest at a catholic church. He was a pastor at the church till 2007 and had to leave the country. He had not filed his income tax since then. A few questions hoping for an answer.

1. Does he owes state tax? How can he find out if he owes state tax?

2. Are there any tax exemptions for priest?

3. What are your suggestions?

I hope you can assist us and would greatly appreciate your answer.

Thanks and God Bless.



Without knowing the exact circumstances of your friend, I can only give you general advice.

1. Does he owes state tax? How can he find out if he owes state tax? It would depend on which state he lived in. You could put the name of the state and the term "income tax" in Google and find that state's tax site and it should give all the requirements of that state's income tax filing.

2. Are there any tax exemptions for priest? He is exempt from the self-employment tax (social security tax) only if he filed an IRS Form 4361 and it was approved by the IRS. Otherwise, he is liable for all income and self-employment tax due on income earned in the United States.

3. What are your suggestions? All the above advice is based on if your friend was a US citizen and /or earning an income in the US...if will need to consult a tax professional regarding the rules and regulations of income earned in the United States by people who are not US citizens.

Hope this helps,

Church Accounting Package

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SS question after moving churches
by: Katie

I am a minister who has missed the window to opt out of social security years ago, and probably would not have chosen to do it at that time. I recently changed churches and positions and feel differently about public insurance and social security. I came across something today that looks like I could possibly have an opportunity to opt out again if I want to. At my current position I started October 2010 and I am not ordained, I am the licensed senior pastor of my church and have all the functions of an ordained minister. Below is what I found that leads me to believe this. Can you verify? If so, would I do this after this next tax year (2012), or this one (2011)?

**A minister may apply for exemption from self employment tax upon changing churches and beliefs. A minister who is ordained by a second church and who previously was not conscientiously opposed to the acceptance of public insurance can qualify for the self-employment tax exemption, by claiming exemption within the prescribed period after the second ordination**

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