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Pastor (SECA or FICA)

by Harrison
(Arkansas)

Our Pastor is the pastor and founder of our church with complete control along with the Board of Directors.
We have been being treating our pastor as an employee. We treat our pastor as a FICA employee. Our Board of Directors agreed to this. We were also told by a CPA that most pastors are considered as SE but if the church wanted to treat the pastor as a FICA employee then we could. I need to now if what we are doing is correct. Is this really by choice of the church or is it a law that all pastors be considered as SECA for social security and medicaid taxes? We really need to know so that we can make sure that we are doing things the right way.

Comments for Pastor (SECA or FICA)

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Jan 21, 2013
 taxes
by: Sandi

You can look to your left and scroll down to Payroll Taxes or go to: https://www.freechurchaccounting.com/payrolltaxes.html

Prayers
Jan 21, 2013
 Social Security Coverage of Members of the Clergy
by: Vickey

Excerpt from IRS Pub 517:

"The services you perform in the exercise of your ministry, of the duties required by your religious order, or of your profession as a Christian Science practitioner or reader are covered by social security and Medicare under SECA.

Your earnings for these ministerial services (defined later) are subject to self employment (SE) tax unless one of the following applies.

  • You are a member of a religious order who has taken a vow of poverty.

  • You ask the Internal Revenue Service (IRS) for an exemption from SE tax for your services and the IRS approves your request. See Exemption From Self Employment (SE) Tax, later.

  • You are subject only to the social security laws of a foreign country under the provisions of a social security agreement between the United States and that country. For more information, see Bilateral Social Security (Totalization) Agreements in Publication 54.


Read the entire publication and then decide if your minister is under the SECA or FICA system.
Aug 25, 2016
 Dual tax status for Ministers
by: Alex Iloani

A licensed or ordained minister generally has a "dual" tax status. For Federal income tax reporting purpose, most ministers are classified as employees of the church, sect or organization they serve. They are however considered self-employed for the purposes of social security and medicare taxes. In summary, unlike most employees, ministers must pay SECA taxes on their ministerial income.

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

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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