While we are all called to ministry in our local church, there are specific requirements for determining whether you are a “minister” in the eyes of the IRS.
This matters, of course, because it affects how you file your taxes. For federal tax purposes, a minister is defined by the IRS as an individual who:
- Is a “duly ordained, commissioned, or licensed minister of a church.” (Note that the ministry must be organized as a church for the minister title to apply.)
- Performs sacerdotal functions (such as marriage and funeral services, dedicating infants, baptizing, and serving communion).
- Conducts religious worship.
- Manages responsibility in the control, conduct, and maintenance of religious organizations (including the religious boards, societies, and other integral agencies of such organizations), under the authority of a religious body constituting a church or denomination.
If this describes you, then both you and your church should handle income and tax reporting per the IRS rules:
- Ministers are treated as self-employed for tax purposes only. (Don’t confuse this with the common-law test to determine whether an individual is an employee or self-employed. Commonly ministers are also employees.)
- Ministers pay taxes under the Self-Employment Contributions Act (SECA) when they file their federal tax returns—which means churches should never deduct FICA-type taxes (Social Security and Medicare) for a qualified minister. However, federal, state, and local tax withholdings do apply to the minister who is an employee. (It is possible for a minister to be exempt from SECA in only a few situations.)
Questions? Use this information as a springboard for further conversation with your accountant, tax preparer, or tax attorney.