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Publication 17
taxmap/pub17/p17-026.htm#en_us_publink1000171285

Special Rules for
Certain Employees(p50)

rule
This section deals with special rules for people in certain types of employment: members of the clergy, members of religious orders, people working for foreign employers, military personnel, and volunteers.
taxmap/pub17/p17-026.htm#en_us_publink1000171286

Clergy(p50)

rule
Generally, if you are a member of the clergy, you must include in your income offerings and fees you receive for marriages, baptisms, funerals, masses, etc., in addition to your salary. If the offering is made to the religious institution, it is not taxable to you.
If you are a member of a religious organization and you give your outside earnings to the religious organization, you still must include the earnings in your income. However, you may be entitled to a charitable contribution deduction for the amount paid to the organization. See chapter 24.
taxmap/pub17/p17-026.htm#en_us_publink1000171288

Pension.(p51)

rule
A pension or retirement pay for a member of the clergy usually is treated as any other pension or annuity. It must be reported on lines 16a and 16b of Form 1040 or on lines 12a and 12b of Form 1040A.
taxmap/pub17/p17-026.htm#en_us_publink1000171289

Housing.(p51)

rule
Special rules for housing apply to members of the clergy. Under these rules, you do not include in your income the rental value of a home (including utilities) or a designated housing allowance provided to you as part of your pay. However, the exclusion cannot be more than the reasonable pay for your service. If you pay for the utilities, you can exclude any allowance designated for utility cost, up to your actual cost. The home or allowance must be provided as compensation for your services as an ordained, licensed, or commissioned minister. However, you must include the rental value of the home or the housing allowance as earnings from self-employment on Schedule SE (Form 1040) if you are subject to the self-employment tax. For more information, see Publication 517, Social Security and Other Information for Members of the Clergy and Religious Workers.
taxmap/pub17/p17-026.htm#en_us_publink1000171290

Members of Religious Orders(p51)

rule
If you are a member of a religious order who has taken a vow of poverty, how you treat earnings that you renounce and turn over to the order depends on whether your services are performed for the order.
taxmap/pub17/p17-026.htm#en_us_publink1000171291

Services performed for the order.(p51)

rule
If you are performing the services as an agent of the order in the exercise of duties required by the order, do not include in your income the amounts turned over to the order.
If your order directs you to perform services for another agency of the supervising church or an associated institution, you are considered to be performing the services as an agent of the order. Any wages you earn as an agent of an order that you turn over to the order are not included in your income.
taxmap/pub17/p17-026.htm#en_us_publink1000171292

Example.(p51)

You are a member of a church order and have taken a vow of poverty. You renounce any claims to your earnings and turn over to the order any salaries or wages you earn. You are a registered nurse, so your order assigns you to work in a hospital that is an associated institution of the church. However, you remain under the general direction and control of the order. You are considered to be an agent of the order and any wages you earn at the hospital that you turn over to your order are not included in your income.
taxmap/pub17/p17-026.htm#en_us_publink1000171293

Services performed outside the order.(p51)

rule
If you are directed to work outside the order, your services are not an exercise of duties required by the order unless they meet both of the following requirements: If you are an employee of a third party, the services you perform for the third party will not be considered directed or required of you by the order. Amounts you receive for these services are included in your income, even if you have taken a vow of poverty.
taxmap/pub17/p17-026.htm#en_us_publink1000171294

Example.(p51)

Mark Brown is a member of a religious order and has taken a vow of poverty. He renounces all claims to his earnings and turns over his earnings to the order.
Mark is a schoolteacher. He was instructed by the superiors of the order to get a job with a private tax-exempt school. Mark became an employee of the school, and, at his request, the school made the salary payments directly to the order.
Because Mark is an employee of the school, he is performing services for the school rather than as an agent of the order. The wages Mark earns working for the school are included in his income.
taxmap/pub17/p17-026.htm#en_us_publink1000171295

Foreign Employer(p51)

rule
Special rules apply if you work for a foreign employer.
taxmap/pub17/p17-026.htm#en_us_publink1000171296

U.S. citizen.(p51)

rule
If you are a U.S. citizen who works in the United States for a foreign government, an international organization, a foreign embassy, or any foreign employer, you must include your salary in your income.
taxmap/pub17/p17-026.htm#en_us_publink1000171297
Social security and Medicare taxes.(p51)
You are exempt from social security and Medicare employee taxes if you are employed in the United States by an international organization or a foreign government. However, you must pay self-employment tax on your earnings from services performed in the United States, even though you are not self-employed. This rule also applies if you are an employee of a qualifying wholly owned instrumentality of a foreign government.
taxmap/pub17/p17-026.htm#en_us_publink1000171298

Employees of international organizations or foreign governments.(p51)

rule
Your compensation for official services to an international organization is exempt from federal income tax if you are not a citizen of the United States or you are a citizen of the Philippines (whether or not you are a citizen of the United States).
Your compensation for official services to a foreign government is exempt from federal income tax if all of the following are true.
taxmap/pub17/p17-026.htm#en_us_publink1000171299
Waiver of alien status.(p51)
If you are an alien who works for a foreign government or international organization and you file a waiver under section 247(b) of the Immigration and Nationality Act to keep your immigrant status, different rules may apply. See Foreign Employer in Publication 525.
taxmap/pub17/p17-026.htm#en_us_publink1000171300

Employment abroad.(p51)

rule
For information on the tax treatment of income earned abroad, see Publication 54.
taxmap/pub17/p17-026.htm#en_us_publink1000171301

Military(p51)

rule
Payments you receive as a member of a military service generally are taxed as wages except for retirement pay, which is taxed as a pension. Allowances generally are not taxed. For more information on the tax treatment of military allowances and benefits, see Publication 3, Armed Forces' Tax Guide.
taxmap/pub17/p17-026.htm#en_us_publink1000207157

Differential wage payments.(p51)

rule
Any payments made to you by an employer during the time you are performing service in the uniformed services are treated as compensation. These wages are subject to income tax withholding and are reported on a Form W-2. See the discussion under Miscellaneous Compensation, earlier.
taxmap/pub17/p17-026.htm#en_us_publink1000171302

Military retirement pay.(p51)

rule
If your retirement pay is based on age or length of service, it is taxable and must be included in your income as a pension on lines 16a and 16b of Form 1040 or on lines 12a and 12b of Form 1040A. Do not include in your income the amount of any reduction in retirement or retainer pay to provide a survivor annuity for your spouse or children under the Retired Serviceman's Family Protection Plan or the Survivor Benefit Plan.
For more detailed discussion of survivor annuities, see chapter 10.
taxmap/pub17/p17-026.htm#en_us_publink1000171304
Disability.(p51)
If you are retired on disability, see Military and Government Disability Pensions under Sickness and Injury Benefits, later.
taxmap/pub17/p17-026.htm#en_us_publink1000171307

Veterans' benefits.(p51)

rule
Do not include in your income any veterans' benefits paid under any law, regulation, or administrative practice administered by the Department of Veterans Affairs (VA). The following amounts paid to veterans or their families are not taxable.
taxmap/pub17/p17-026.htm#en_us_publink1000171308

Volunteers(p52)

rule
The tax treatment of amounts you receive as a volunteer worker for the Peace Corps or similar agency is covered in the following discussions.
taxmap/pub17/p17-026.htm#en_us_publink1000171309

Peace Corps.(p52)

rule
Living allowances you receive as a Peace Corps volunteer or volunteer leader for housing, utilities, household supplies, food, and clothing are exempt from tax.
taxmap/pub17/p17-026.htm#en_us_publink1000171310
Taxable allowances.(p52)
The following allowances must be included in your income and reported as wages:
taxmap/pub17/p17-026.htm#en_us_publink1000171311

Example.(p52)

Gary Carpenter, a Peace Corps volunteer, gets $175 a month as a readjustment allowance during his period of service, to be paid to him in a lump sum at the end of his tour of duty. Although the allowance is not available to him until the end of his service, Gary must include it in his income on a monthly basis as it is credited to his account.
taxmap/pub17/p17-026.htm#en_us_publink1000171312

Volunteers in Service to America (VISTA).(p52)

rule
If you are a VISTA volunteer, you must include meal and lodging allowances paid to you in your income as wages.
taxmap/pub17/p17-026.htm#en_us_publink1000171313

National Senior Services Corps programs.(p52)

rule
Do not include in your income amounts you receive for supportive services or reimbursements for out-of-pocket expenses from the following programs.
taxmap/pub17/p17-026.htm#en_us_publink1000171314

Service Corps of Retired Executives (SCORE).(p52)

rule
If you receive amounts for supportive services or reimbursements for out-of-pocket expenses from SCORE, do not include these amounts in income.
taxmap/pub17/p17-026.htm#en_us_publink1000171315

Volunteer tax counseling.(p52)

rule
Do not include in your income any reimbursements you receive for transportation, meals, and other expenses you have in training for, or actually providing, volunteer federal income tax counseling for the elderly (TCE).
You can deduct as a charitable contribution your unreimbursed out-of-pocket expenses in taking part in the volunteer income tax assistance (VITA) program. See chapter 24.