New Minister

Continuing education for ministry leaders
New Minister
Weekly Lessons, created and written by Richard R. Hammar, J.D., LL.M., CPA, give you a basic legal overview of essential topics based on staff or volunteer positions within a church.

This Week's LessonWeek of February 2

Should I Report My Social Security Taxes as an Employee or as Self-Employed?

Introduction

This lesson examines one of the most confusing topics for new ministers: your employment status for Social Security purposes. The Executive Summary provides a concise review of the key points. Before we get started, test your knowledge by completing the following quiz.

Quiz

Executive Summary

Ministers always are self-employed for social security purposes with respect to their ministerial services. This is true even if you are treated as an employee for federal income tax purposes. This means you pay the self-employment tax, not "social security" and "Medicare" taxes. Your employing church must not treat you as employee for social security purposes, even though they issue you a W-2 Form for income taxes.

Overview

There is one provision in the tax code that has caused more confusion for ministers and church treasurers than any other, and it is this—ministers are always treated as self-employed for purposes of Social Security with regard to services they perform in the exercise of their ministry. And, this is true even if they are employees for federal income tax reporting purposes. This is sometimes referred to as the "dual tax status" of ministers.

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