Pastor FICA vs SECA

by Raymond Hoskie
(Franklin, VA )

My Pastor has a full time job and pastor's part time. He does not have regular office hours at the church. He has been treat as an employee, issued a W-2 and also the church has been paying one half his FICA and Medicare. This has been going on for five years. How should this be corrected and get him on the SECA side of the system? Should he be considered as an employee or self employed?

Comments for Pastor FICA vs SECA

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Jan 14, 2013
by: Anonymous

This is a good place to start:
Most pastors are "duel" employed. See IRS form SS-8 if unsure.
The church does not take out tax unless the paperwork has been done to request it by the pastor. Most churches do not pay the taxes, if given as a benefit(no form done) the amount is included in box 1 of the W2.
Housing allowance goes in box 14.
"This has been going on for five years. How should this be corrected"
It is best to contact an accountant and find out if there is an actual problem, if there is, do the corrections they suggest and any W2c, W3c's needed. I tend to call the IRS for questions and they have been very helpful.

Jan 19, 2013
Pastor FICA vs SECA
by: RH

Thanks anonymous! We are fine. Just want to make sure.

Jan 25, 2013
An additional question on this topic.
by: Anonymous

Our Pastor gets payed as an employee, (and has no housing allowance.)The church pays the FICA tax for him, as an employee, as he requested. Is this OK...any legal issues to consider for the future? Also, when he files his return would he then NOT have to fill out the SE tax form. How would he concider the salary, as regular employee income?
Thanks for your help!

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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 =)

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