by Mark Jones

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.

Comments are reviewed by an editor before appearing on the page.
See Blog Comment Policy

1 comment

  1. The last paragraph of this article includes the statement, “However, federal, state, and local tax withholdings do apply to the minister who is an employee.”

    It is important to note that ministers are not subject to MANDATORY income tax withholding. They may volunteer to enter an income tax withholding arrangement with the church/employer (Dan Busby, Zondervan 2010 Minister’s Tax & Financial Guide, pp 21-22).

Leave a comment