Who is a minister for federal tax reporting purposes?

We have someone on staff we call our pastor of education, but some members on our board aren’t sure she qualifies as a minister when reporting income taxes. How can we know for sure?

In deciding if a person is a minister for federal income tax reporting, the following five factors must be considered: (1) ordained, commissioned, or licensed status (required); (2) administration of sacraments; (3) conduct of religious worship; (4) management responsibilities in the local church or a parent denomination; and (5) whether the person is considered a religious leader by the church or parent denomination.

In general, the IRS and the courts require that a minister be ordained, commissioned, or licensed, and then they apply a "balancing test" with respect to the other four factors. The more of those factors that a person satisfies, the more likely he or she will be deemed a minister for tax reporting.

—Adapted from the annual Church & Clergy Tax Guide by Richard R. Hammar, available on ChurchLawAndTaxStore.com

Log In For Full Access

Interested in becoming a member? Learn more.

Related Topics:
From Issue:
View All
from our store
2019 Church & Clergy Tax Guide

2019 Church & Clergy Tax Guide

Find comprehensive help understanding United States tax laws as they relate to pastors and churches.
12 Law & Tax Guidelines for New Ministers

12 Law & Tax Guidelines for New Ministers

Essential knowledge to ensure legal and financial clarity and integrity in ministry.
Understanding Pastoral Liability

Understanding Pastoral Liability

Know the situations in which a pastor is personally liable for wrongdoing.

ChurchSalary

ChurchSalary

Experience a whole new way to set compensation. Eliminate the guesswork – get access to detailed compensation reports in just minutes.