The Tax Advisor
- Whether an individual qualifies as a minister for tax purposes is determined based on who employs the individual and the duties the individual performs. An individual does not have to work for a church or denomination to be considered a minister but must perform the duties of a minister as specified in the regulations to be treated as a minister.
- Ministers are subject to special tax rules, including eligibility for a tax-free parsonage or housing allowance, being treated as self-employed for Social Security tax purposes, and being exempt from federal income tax withholding.
- If an employee provides the minister a housing allowance, the exclusion is limited to the lesser of the amount designated in advance by the employer as a housing allowance, the fair rental value of the residence, or the actual expenses incurred.
Tax code, tax law, clergy
Schloemer, Paul G., "Clergy Tax Rules Extend Beyond Churches" (2009). Business Administration Faculty Publications. 102.