Key point. Ministers may exempt themselves from paying self-employment taxes on their ministerial earnings by filing a timely exemption application with the IRS. The application must be filed by the due date of the federal tax return for the second year in which the minister has net earnings from self-employment of $400 or more, any portion of which comes from the performance of ministerial services. The performance of ministerial services may include services performed by licensed or commissioned ministers prior to their ordination.
Brannon v. Commissioner, T.C. Memo. 1999-370 (1999).
The Tax Court ruled that a minister was not exempt from social security because his exemption application was filed too late.
In order to be exempt from social security (self-employment) taxes, a minister must meet several requirements. One of these requirements is the submission of a timely exemption application ...