Back to List

Category: Tax Questions

Minister / Clergy Member Tax Return

Ministers are individuals duly ordained, commissioned or licensed by a church.  'Church' is used generically and does not refer to any particular religion.  Compensation paid to a minister or clergy member typically is reported to them on Form W-2 (if the minister is an employee of the church), or Form 1099-MISC (if the minister performed services such as weddings and baptisms).  Most ministers are treated as dual-status taxpayers.  They are employees for income tax purposes but not for Social Security and Medicare tax.  Ministers are not subject to federal income tax withholding.  A minister and employer may agree to voluntary withholding to cover any income and SE tax.  All withheld tax is reported in box 2, Form W-2, as federal income tax withheld.  If boxes 3-6 on the Form W-2 are empty, the minister is required to complete a Schedule SE using the minister's worksheet to determine the taxable amount of their ministers income.  If the minister received a parsonage allowance, it will generally be reported in box 14.  The amount listed there is considered the fair market value of the parsonage and will also need to be entered on the Schedule SE minister's worksheet.

If the minister received a Form 1099-MISC, or has self-employment income from weddings, baptisms, etc., the income should be reported on Schedule C, Form 1040.  If the minister has incurred out of pocket expenses related to this income, they should be reported as expenses on the Schedule C.

Schedule SE will need to be completed to calculate SE tax on the minister's Form W-2 wages, parsonage and utilities allowance.  The only exception to paying SE tax on these items when the minister or clergy member has filed either Form 4361 or Form 4029 which must be approved by the IRS.

To display instructions for entering Minister's Income on Schedule C in the tax program click here.

To display instructions for entering Minister's Income on Schedule SE in the tax program click here.

Select the links below to show/hide additional information about each topic:

 Minister's Income Tax vs. SE Tax
 Independent contractor vs. employee
 Earned Income Credit (EIC)
 Parsonage Allowance
 Fair rental value
 Surviving Spouses
 Exemptions From Self-Employment Tax and Social Security Tax
 Vow of poverty
 Church Employees Other Than Ministers

Additional links:
Publication 15-A - Employer's Supplemental Tax Guide
Tax Topic 417 - Earnings for Clergy
Tax Topic 508 - Miscellaneous Expenses
Tax Topic 514 - Employee Business Expenses

Last Updated: 3/22/2018

Email Article