Ministry & Faith Workers

Dual tax status: a minister is an EMPLOYEE for income tax but SELF-EMPLOYED for Social Security (SECA) — the most misunderstood status in the tax code.

Housing / parsonage allowance: excluded from income tax when designated IN ADVANCE by the church — but it is INCLUDED in self-employment tax. Designation after the fact does not count.

Opting out of Social Security (Form 4361) requires conscientious or religious opposition to public insurance, is effectively IRREVOCABLE, and must be counsel-gated — never a casual money-saving move.

Church payroll basics: churches are generally exempt from FUTA; a church may elect optional FICA withholding treatment for its employees. Ministers themselves are never FICA — always SECA.