Q&A: Who Is a Minister for Federal Tax Reporting Purposes?

A church employee must be ordained, commissioned, or licensed, with a “balancing test” applied to four other factors.

We have someone on staff we call our pastor of education, but some members on our board aren’t sure she qualifies as a minister when reporting income taxes. How can we know for sure?

In deciding if a person is a minister for federal income tax reporting, the following five factors must be considered:
  1. ordained, commissioned, or licensed status (required);
  2. administration of sacraments;
  3. conduct of religious worship;
  4. management responsibilities in the local church or a parent denomination; and
  5. whether the person is considered a religious leader by the church or parent denomination.
  6. In general, the IRS and the courts require that a minister be ordained, commissioned, or licensed, and then they apply a “balancing test” with respect to the other four factors. The more of those factors that a person satisfies, the more likely he or she will be deemed a minister for tax reporting.
    Adapted from the annual Church & Clergy Tax Guide.
Richard R. Hammar is an attorney, CPA and author specializing in legal and tax issues for churches and clergy.

This content is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. "From a Declaration of Principles jointly adopted by a Committee of the American Bar Association and a Committee of Publishers and Associations." Due to the nature of the U.S. legal system, laws and regulations constantly change. The editors encourage readers to carefully search the site for all content related to the topic of interest and consult qualified local counsel to verify the status of specific statutes, laws, regulations, and precedential court holdings.

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