Pastoral exemption – Form 4361

Two rules have caused a great deal of confusion for minister’s coverage of Social Security. First, “ministers always are self-employed for Social Security with respect to their ministerial services. This means they pay the self-employment tax, not “Social Security” and “Medicare” taxes. Second, under very limited circumstances, ministers can exempt themselves from self-employment taxes with respect to services they perform in the exercise of ministry by filing a timely Form 4361 with the IRS.”  You may click on the link below for comprehensive information on this subject and to determine eligibility for exemption.  The article is written by Richard Hammer, an attorney, CPA, and author specializing in legal and tax issues for churches and clergy.

Exemption of Ministers from Social Security Coverage