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

Miscellaneous Benefits

§ 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. [165] See R. HAMMAR, CHURCH AND CLERGY TAX GUIDE chapters 9 and 11. 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 be owned by the church and not by the minister in order to be qualified for ...

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