Jump directly to the Content

Pastor Left Without Retirement Benefits Sues Church

The church had no obligation to withhold the minister’s Social Security and Medicare taxes, says court.

Key point. Ministers always are self-employed for Social Security with respect to services performed in the exercise of ministry (with the exception of some government-employed chaplains). As a result, ministers pay the self-employment tax rather than the employee’s share of Social Security and Medicare taxes—even if they report their federal income taxes as employees.

A federal district court in New York ruled that a church did not act improperly in failing to withhold Social Security taxes from its pastor’s compensation.


A pastor was employed by a denominational agency (the “church”) for 20 years. During his employment, the church classified him as an employee and issued him annual W-2 forms, but it did not withhold FICA taxes (Social Security and Medicare) from his compensation.

In 2017, the pastor retired and the Social Security Administration informed ...

Join now to access this member-only content

Become a Member

Already a member? for full access.

Related Topics:
  • May 26, 2021

Related ResourcesVisit Store

Church Compensation - Second Edition
Church Compensation - Second Edition
From Strategic Plan to Compliance
CARES Act and CAA Table
CARES Act and CAA Table
A Side-By-Side Look at COVID-19 Economic Relief
2021 Church & Clergy Tax Guide (Book)
2021 Church & Clergy Tax Guide (Book)
The most comprehensive and authoritative tax guide available.
Nonprofit Finance
Nonprofit Finance
The Field Guide for Financial Operations of Ministries, Schools, and Other Public Charities