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

Social Security

§ 1.03.01
Key point 1-03.01. While most ministers are employees for federal income tax reporting purposes, they all are self employed for Social Security purposes with respect to services they perform in the exercise of ministry. This means that ministers are not subject to "FICA" taxes, even though they report their income taxes as employees and receive a W 2 from their church. Rather, they pay the "self employment tax."

Social Security taxes are collected under two separate tax systems. Under the Federal Insurance Contributions Act (FICA)[24] I.R.C. §§ 3101 et seq. , half the tax is paid by the employee and the other half is paid by the employer. Under the Self Employment Contributions Act (SECA)[25] Id. at §§ ...

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