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Pastor, Church & Law

written by Richard R. Hammar, J.D., LL.M., CPA

Miscellaneous Benefits

Volume 1 . Chapter 3 . § 3-11

Ministers are eligible for various benefits under federal tax laws. Most important, they are permitted to exclude from their gross income the cost of owning or maintaining a residence; they can elect (if certain conditions are met) to be exempt from self-employment taxes with respect to compensation earned in the performance of ministerial duties; they are not subject to federal income tax withholding (even if they report their federal income taxes as employees); and they are not considered to be "employees" subject to federal unemployment taxes. Most states similarly exempt ministers from unemployment taxes and income tax withholding. Several states exempt parsonages from property taxes, although nearly all of such states require that a parsonage ...

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