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Introduction

Social security and Medicare taxes are collected under two systems. Under the Federal Insurance Contributions Act (FICA), the employee and the employer each pay half of the taxes. Under the Self-Employment Contributions Act (SECA), the self-employed person pays all the taxes. No earnings are subject to both systems.

This publication covers several issues relating to the collection of social security and Medicare taxes from members of the clergy and religious workers, including:

• Which earnings are taxed under FICA and which under SECA,
• How to figure net earnings from self-employment, and
• How a member of the clergy (minister, member of religious order, or Christian Science practitioner) can apply for an exemption from self-employment tax.

This publication also covers certain income tax rules of interest to the clergy.

A comprehensive example with filled-in forms, showing a minister having income that is taxed under FICA and other income that is taxed under SECA, is at the end of this publication.

Note. In this publication the term "church" is generally used in its generic sense and not in reference to any particular religion.

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Thursday, 19 Nov 1998 16:17:22 EST