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taxmap/pubs/p517-000.htm#en_us_publink100033506
Publication 517

 
Social Security 
and Other 
Information for 
Members of the  
Clergy and 
Religious 
Workers

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What's New(p1)


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SE tax rate.(p1)
For 2012, the Old Age, Survivors, and Disability Insurance (OASDI) portion of the SE tax remains at 10.4%. The Medicare (HI) portion of the SE tax remains 2.9%. As a result, the SE tax rate remains at 13.3%. For more information, see the Instructions for Schedule SE (Form 1040).
taxmap/pubs/p517-000.htm#en_us_publink1000250591
Earnings subject to social security.(p1)
For 2012, the maximum wages and self-employment income subject to social security tax increases from $106,800 to $110,100.
taxmap/pubs/p517-000.htm#en_us_publink100033510
Modified AGI limit for traditional IRA contributions increased.(p1)
For 2012, you may be able to take an IRA deduction if you were covered by a retirement plan at work and your modified AGI is:
  • Less than $112,000 if married filing jointly or qualifying widow(er),
  • Less than $68,000 if single or head of household, or
  • Less than $10,000 if married filing separately.
If you file a joint return and either you or your spouse was not covered by a retirement plan at work, you may be able to take an IRA deduction if your modified AGI is less than $183,000.
taxmap/pubs/p517-000.htm#en_us_publink100033511
Modified AGI limit for Roth IRA contributions increased.(p1)
For 2012, you may be able to contribute to your Roth IRA if your modified AGI is:
  • Less than $183,000 if married filing jointly or qualifying widow(er),
  • Less than $125,000 if single, head of household, or married filing separately and did not live with your spouse at any time during the year, or
  • Less than $10,000 if married filing separately and you lived with your spouse at any time during the year.
taxmap/pubs/p517-000.htm#en_us_publink1000173770
Earned income credit (EIC).(p2)
For 2012, the maximum amount of income you can earn and still claim the EIC has increased. You may be able to take the EIC if you earned less than $45,060 ($50,270 for married filing jointly) and you have three or more qualifying children; $41,952 ($47,162 for married filing jointly) and you have two qualifying children; $36,920 ($42,130 for married filing jointly) and you have one qualifying child; and $13,980 ($19,190 for married filing jointly) and you do not have any qualifying children.

Reminders(p2)


taxmap/pubs/p517-000.htm#en_us_publink1000293439
Future developments. (p2)
For the latest information about developments related to Pub. 517, such as legislation enacted after it was published, go to www.irs.gov/pub517.
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Photographs of missing children.(p2)
The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child.

taxmap/pubs/p517-000.htm#en_us_publink1000270158Introduction

Three federal taxes are paid on wages and self-employment income—income tax, social security tax, and Medicare tax. Social security and Medicare taxes are collected under one of two systems. Under the Self-Employment Contributions Act (SECA), the self-employed person pays all the taxes. Under the Federal Insurance Contributions Act (FICA), the employee and the employer each pay half of the taxes. No earnings are subject to both systems.
taxmap/pubs/p517-000.htm#f15021x01

Table 1.  Are Your Ministerial Earnings* Covered Under FICA or SECA?

Find the class to which you belong in the left column and read across the table to find if you are covered under FICA or SECA. Do not rely on this table alone. Also read the discussion for the class in the following pages.

ClassCovered under FICA?Covered under SECA?
MinisterNO. Your ministerial earnings are exempt.YES, if you do not have an approved exemption from the IRS.

NO, if you have an approved exemption.
Member of a religious order who has not taken a vow of povertyNO. Your ministerial earnings are exempt.YES, if you do not have an approved exemption from the IRS.

NO, if you have an approved exemption.
Member of a religious order who has taken a vow of povertyYES, if:
  • Your order elected FICA coverage for its members, or
  • You worked outside the order and the work was not required by, or done on behalf of, the order.

NO, if neither of the above applies.
NO. Your ministerial earnings are exempt.
Christian Science practitioner or readerNO. Your ministerial earnings are exempt.YES, if you do not have an approved exemption from the IRS.

NO, if you have an approved exemption.
Religious worker (church employee)YES, if your employer did not elect to exclude you.

NO, if your employer elected to exclude you.
YES, if your employer elected to exclude you from FICA.

NO, if you are covered under FICA.
Member of a recognized religious sectYES, if you are an employee and do not have an approved exemption from the IRS.

NO, if you have an approved exemption.
YES, if you are self-employed and do not have an approved exemption from the IRS.

NO, if you have an approved exemption.
* Ministerial earnings are the self-employment earnings that result from ministerial services, defined and discussed later.
This publication contains information for the following classes of taxpayers.
Note.Unless otherwise noted, in this publication references to members of the clergy include ministers, members of a religious order (but not members of a recognized religious sect), and Christian Science practitioners and readers.
This publication covers the following topics about the collection of social security and Medicare taxes from members of the clergy, religious workers, and members of a recognized religious sect.
This publication also covers certain income tax rules of interest to ministers and members of a religious order.
A Comprehensive Example shows filled-in forms for a minister who has income taxed under SECA, other income taxed under FICA, and income tax reporting of items specific to a minister.
Pencil
In the back of Publication 517 is a set of worksheets that you can use to figure the amount of your taxable ministerial income and allowable deductions. You will find these worksheets right after the Comprehensive Example.
Note.In this publication, the term "church" is generally used in its generic sense and not in reference to any particular religion.
taxmap/pubs/p517-000.htm#en_us_publink100081112

Comments and suggestions.(p3)

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We welcome your comments about this publication and your suggestions for future editions.
You can write to us at the following address:

Internal Revenue Service
Individual and Specialty Forms and Publications Branch
SE:W:CAR:MP:T:I
1111 Constitution Ave. NW, IR-6526
Washington, DC 20224


We respond to many letters by telephone. Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence.
You can email us at taxforms@irs.gov. Please put "Publications Comment" on the subject line. You can also send us comments from www.irs.gov/formspubs/. Select "Comment on Tax Forms and Publications" under "Information about."
Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products.
taxmap/pubs/p517-000.htm#en_us_publink100081113
Ordering forms and publications.(p3)
Visit www.irs.gov/formspubs/ to download forms and publications, call 1-800-829-3676, or write to the address below and receive a response within 10 days after your request is received.

Internal Revenue Service
1201 N. Mitsubishi Motorway
Bloomington, IL 61705-6613


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Tax questions.(p3)
If you have a tax question, check the information available on IRS.gov or call 1-800-829-1040. We cannot answer tax questions sent to either of the above addresses.

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Useful items

You may want to see:


Publication
  54 Tax Guide for U.S. Citizens and Resident Aliens Abroad
 525 Taxable and Nontaxable Income
 529 Miscellaneous Deductions
 535 Business Expenses
 590 Individual Retirement Arrangements (IRAs)
 596 Earned Income Credit (EIC)
Form (and Instructions)
 SS-8: Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding
 SS-16: Certificate of Election of Coverage Under the Federal Insurance Contributions Act
 Schedule C (Form 1040): Profit or Loss From Business (Sole Proprietorship)
 Schedule C-EZ (Form 1040): Net Profit From Business (Sole Proprietorship)
 Schedule SE (Form 1040): Self-Employment Tax
 1040-ES: Estimated Tax for Individuals
 1040X: Amended U.S. Individual Income Tax Return
 4029: Application for Exemption From Social Security and Medicare Taxes and Waiver of Benefits
 4361: Application for Exemption From Self-Employment Tax for Use by Ministers, Members of Religious Orders and Christian Science Practitioners
 8274: Certification by Churches and Qualified Church-Controlled Organizations Electing Exemption From Employer Social Security and Medicare Taxes
taxmap/pubs/p517-000.htm#en_us_publink100033519

Ordering publications and forms.(p3)

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See How To Get Tax Help, near the end of this publication, for information about getting these publications and forms.
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Social Security Coverage(p3)

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This section gives information about which system (SECA or FICA) is used to collect social security and Medicare taxes from members of the clergy (ministers, members of a religious order, and Christian Science practitioners and readers) and religious workers (church employees).
taxmap/pubs/p517-000.htm#en_us_publink1000255884

Coverage of Members of the Clergy(p3)

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The services you perform in the exercise of your ministry, of the duties required by your religious order, or of your profession as a Christian Science practitioner or reader are covered by social security and Medicare under SECA. Your earnings for these ministerial services (defined later) are subject to self-employment (SE) tax unless one of the following applies.
Your earnings that are not from ministerial services may be subject to social security tax under FICA or SECA according to the rules that apply to taxpayers in general. See Ministerial Services, later.
taxmap/pubs/p517-000.htm#en_us_publink1000255885

Ministers(p3)

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If you are a minister of a church, your earnings for the services you perform in your capacity as a minister are subject to SE tax, even if you perform these services as an employee of that church. However, you can request that the IRS grant you an exemption, as discussed under Exemption From Self-Employment (SE) Tax, later. For the specific services covered, see Ministerial Services, later.
taxmap/pubs/p517-000.htm#en_us_publink1000255886

Ministers defined.(p3)

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Ministers are individuals who are duly ordained, commissioned, or licensed by a religious body constituting a church or church denomination. They are given the authority to conduct religious worship, perform sacerdotal functions, and administer ordinances or sacraments according to the prescribed tenets and practices of that church or denomination.
If a church or denomination ordains some ministers and licenses or commissions others, anyone licensed or commissioned must be able to perform substantially all the religious functions of an ordained minister to be treated as a minister for social security purposes.
taxmap/pubs/p517-000.htm#en_us_publink1000255887

Employment status for other tax purposes.(p3)

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Even though, for social security tax purposes, you are considered a self-employed individual in performing ministerial services, you may be considered an employee for income tax or retirement plan purposes in performing those same ministerial services. For income tax or retirement plan purposes, some of your income may be considered self-employment income and other income may be considered wages.
Unless you are exempt from SECA, you will pay SE tax on both your wages and your self-employment income.
taxmap/pubs/p517-000.htm#en_us_publink1000255888
Common-law employee.(p3)
Under common-law rules, you are considered either an employee or a self-employed person. Generally, you are an employee if you perform services for someone who has the legal right to control both what you do and how you do it, even if you have considerable discretion and freedom of action. For more information about the common-law rules, see Publication 15-A, Employer's Supplemental Tax Guide.
If you are employed by a congregation for a salary, you are generally a common-law employee and income from the exercise of your ministry is considered wages for income tax purposes. However, amounts received directly from members of the congregation, such as fees for performing marriages, baptisms, or other personal services, are not considered wages; such amounts are self-employment income for both income tax purposes and social security tax purposes.
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Example.(p3)

A church hires and pays you a salary to perform ministerial services subject to its control. Under the common-law rules, you are an employee of the church while performing those services.
taxmap/pubs/p517-000.htm#en_us_publink1000255889
Form SS-8.(p3)
If you are not certain whether you are an employee or a self-employed person, you can get a determination from the IRS by filing Form SS-8.
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Members of Religious Orders(p3)

rule
If you are a member of a religious order who has not taken a vow of poverty, your earnings for ministerial services you perform as a member of the order are subject to SE tax. See Ministerial Services, later. However, you can request that the IRS grant you an exemption as discussed under Exemption From Self-Employment (SE) Tax, later.
taxmap/pubs/p517-000.htm#en_us_publink100033528

Vow of poverty.(p4)

rule
If you are a member of a religious order and have taken a vow of poverty, you are already exempt from paying SE tax on your earnings for ministerial services you perform as an agent of your church or its agencies. You do not need to request a separate exemption. For income tax purposes, the earnings are tax free to you. Your earnings are considered the income of the religious order.
taxmap/pubs/p517-000.htm#en_us_publink100033529
Services covered under FICA at the election of the order.(p4)
However, even if you have taken a vow of poverty, the services you perform for your church or its agencies may be covered under social security. Your services are covered if your order, or an autonomous subdivision of the order, elects social security coverage for its current and future vow-of-poverty members.
The order or subdivision elects coverage by filing Form SS-16. It can elect coverage for certain vow-of-poverty members for a retroactive period of up to 20 calendar quarters before the quarter in which it files the certificate. If the election is made, the order or subdivision pays both the employer's and employee's share of the tax. You do not pay any of the FICA tax.
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Services performed outside the order.(p4)
Even if you are a member of a religious order who has taken a vow of poverty and are required to turn over to the order amounts you earn, your earnings are subject to federal income tax withholding and employment (FICA) tax if you:
In this case, you are considered an employee of that outside organization. You may, however, be able to take a charitable deduction for the amount you turn over to the order. See Publication 526, Charitable Contributions.
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Lay employees.(p4)

rule
Lay employees generally are covered by social security. However, see Election by Church To Exclude Their Employees From FICA Coverage, later, under Coverage of Religious Workers (Church Employees).
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Rulings.(p4)

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Organizations and individuals may request rulings from the IRS on whether they are religious orders, or members of a religious order, respectively, for FICA tax, SE tax, and federal income tax withholding purposes. To request a ruling, follow the procedures in Revenue Procedure 2012-1, 2012-1 I.R.B. 1, available at www.irs.gov/irb/2012-01_IRB/ar06.html.
taxmap/pubs/p517-000.htm#en_us_publink1000255891

Christian Science Practitioners and Readers(p4)

rule
Generally, your earnings from services you perform in your profession as a Christian Science practitioner or reader are subject to SE tax. However, you can request an exemption as discussed under Exemption From Self-Employment (SE) Tax, later.
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Practitioners.(p4)

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Christian Science practitioners are members in good standing of the Mother Church, The First Church of Christ, Scientist, in Boston, Massachusetts, who practice healing according to the teachings of Christian Science. Christian Science practitioners are specifically exempted from licensing by state laws.
Some Christian Science practitioners also are Christian Science teachers or lecturers. Income from teaching or lecturing is considered the same as income from their work as practitioners.
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Readers.(p4)

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For tax purposes, Christian Science readers are considered the same as ordained, commissioned, or licensed ministers.
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Coverage of Religious Workers (Church Employees)(p4)

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If you are a religious worker (a church employee) and are not in one of the classes already discussed, your wages are generally subject to social security and Medicare tax under FICA, not SECA. Some exceptions are discussed next.
taxmap/pubs/p517-000.htm#en_us_publink100033537

Election by Church To Exclude Their Employees From FICA Coverage(p4)

rule
Churches and qualified church-controlled organizations (church organizations) that are opposed for religious reasons to the payment of social security and Medicare taxes can elect to exclude their employees from FICA coverage. If your employer makes this election, it does not pay the employer's portion of the FICA taxes or withhold from your pay your portion of the FICA taxes. Instead, your wages are subject to SECA and you must pay SE tax on your wages if they exceed $108.28 during the tax year. However, you can request an exemption from SE tax if you are a member of a recognized religious sect, as discussed below.
Churches and church organizations make this election by filing two copies of Form 8274. For more information about making this election, see Form 8274.
taxmap/pubs/p517-000.htm#en_us_publink100033538

Election by Certain Church Employees Who Are Opposed to Social Security and Medicare(p4)

rule
You may be able to choose to be exempt from social security and Medicare taxes, including the SE tax, if you are a member of a recognized religious sect or division and work for a church (or church-controlled nonprofit division) that does not pay the employer's part of the social security tax on wages. This exemption does not apply to your service, if any, as a minister of a church or as a member of a religious order.
Make this choice by filing Form 4029. See Requesting Exemption—Form 4029, later, under Members of Recognized Religious Sects.
taxmap/pubs/p517-000.htm#en_us_publink100033539

U.S. Citizens and Resident
and Nonresident Aliens(p4)

rule
To be covered under the SE tax provisions (SECA), individuals generally must be citizens or resident aliens of the United States. Nonresident aliens are not covered under SECA unless a social security agreement in effect between the United States and the foreign country determines that you are covered under the U.S. social security system.
To determine your alien status, see Publication 519, U.S. Tax Guide for Aliens.
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Residents of Puerto Rico, the U.S. Virgin Islands, Guam, the CNMI, and American Samoa.(p4)

rule
If you are a resident of one of these U.S. possessions but not a U.S. citizen, for SE tax purposes you are treated the same as a citizen or resident alien of the United States. For information on figuring the tax, see Self-Employment Tax: Figuring Net Earnings, later.