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Procedure Name: | Working with Reliant as a Commissioned or Ordained Minister |
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Scope: | All Staff |
Revision Date: | January 26, 2024 |
Last Review Date: | January 26, 2024 |
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Please review the process of claiming your status as a commissioned or ordained minister in relation to your work with Reliant. You are not required to claim your work as a commissioned/ordained minister to your work with Reliant. When you submit your certificate, your tax status is immediately changed and cannot be reverted unless your job role changes where you are no longer performing ministerial services. |
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Congratulations on being ordained or commissioned! Your character and maturity is a testimony of God’s sanctifying work in your life and your humility before Him. It’s a privilege to serve together with you. The information contained in this packet is intended to help you understand some of the financial and employment issues related to ministers. GCM is also shipping you a complimentary copy of a great resource in the Zondervan Minister’s Tax and Financial Guide. Please use this book as your starting point in educating yourself on the issues of social security tax, parsonage allowance, social security exemption, and other financial topics on being a minister. If you have additional questions, we strongly recommend you talk with a professional who is up to date on current practices in this field.
The following is included in this guide:
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FAQ
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ECFA - Ministers and Social Security Tax
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ECFA - Ministers Opting Out of Social Security
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Where do I begin?
The first thing you should do is read the Minister’s Tax and Financial Guide. This book contains a wealth of the information you will need to properly understand your options and responsibilities as a minister. Next, you’ll want to request a parsonage allowance from GCM.
Should I seek Professional Tax Advice?
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How do I request a parsonage allowance from GCM?
Complete a GCM Parsonage Request Form and email it to hr@gcmweb.org. You may find this form on StaffNet under the “Payroll” tab, in the “Forms” section. Once your parsonage amount has been approved, it will become effective on the next applicable pay period.
To change your parsonage amount in the future, simply complete a new Parsonage Request Form and email it to hr@gcmweb.org for approval. Dave Meldrum-Green, our Director of Organizational Affairs & Treasurer reviews and approves all parsonage requests.
- Please read Chapter 5 in the Minister’s Tax and Financial Guide for information on parsonage allowance.
What happens with my social security tax?
Once GCM receives notice you’ve been ordained or commissioned, GCM will stop withholding social security (FICA) tax from your paychecks. However, you now have the personal responsibility to pay this tax to the government.
- Please read Chapter 7 in the Minister’s Tax and Financial Guide to find out why this change must take place.
- Please read Chapter 8 to find out your options for paying this tax.
What about opting out of the social security system?
Please read Chapter 7 in the Minister’s Tax and Financial Guide to find out about the option of opting out of social security tax. Remember, you cannot make this decision to opt out simply because you think you can achieve a better investment return on those funds elsewhere (economic reasons). You may also want to talk with other ministers who have dealt with this option. To obtain a copy of the IRS Form 4361, you may visit the IRS web site at www.irs.gov. We’ve also included additional reading resources from the ECFA.
If I decide to stay in the social security system, am I eligible for additional compensation from GCM to offset the social security taxes?
Once a minister communicates his decision to GCM to remain in the social security system (thereby giving up the option to opt out of the system) then GCM will give that employee an additional 7.65% in salary from that point forward. This additional GCM compensation is called a “Social Security Offset”.
To be eligible for the “SS Offset,” you must send an email to GCM notifying us of your decision to remain in the social security system. Please email hr@gcmweb.org and submit a new Support Goal Calculator.
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By submitting your certificate to Reliant, you are choosing to apply your new tax status to your work with Reliant. Once you submit your certificate, we must immediately change your tax status to no longer withhold FICA taxes. Once this change is made, we can not revert the tax settings unless the Minister has a job role change in which they are no longer performing ministerial services. Helpful Solomon page regarding certificate requirements - Commissioned, Licensed and/or Ordained Minister Certificate Requirements If you would like to claim your work with Reliant as that of a Commissioned/Ordained Minister, proceed to the next section. Otherwise, no further action is necessary.
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Additional Resources
- Claiming Exemption from Social Security Taxes
- Paying SECA Taxes
- Parsonage
- ECFA Ministers' Tax and Financial Guide
- Ministers' Tax Guide by Guidestone
- Worth's Income Tax Guide for Ministers. You can contact them at 574-269-2121
If I decide to opt out of the social security system, what do I do?
Please read the section titled “Opting Out of Social Security” in Chapter 7 in Minister’s Tax & Financial Guide very carefully. Follow the instructions given in the Guide. You may also want to contact a tax or accounting professional for additional advice. GCM is not able to assist you with this decision. It is a completely personal decision. Remember this is a permanent decision.
You will, however, need to inform both GCM and your local church in writing that you are conscientiously opposed to public insurance as a minister, based upon religious convictions.
Please be aware that if you request a “Social Security Offset” and then decide within the two years that you are opting out, you will also be required to repay the “SS Offset”.
Summary of steps:
1. Read the Zondervan Minister’s Tax & Financial Guide.
2. Complete the GCM Parsonage Request Form (See StaffNet Payroll tab). Send to hr@gcmweb.org.
3. Make an informed and well thought out decision about social security exemption.
- If you decide to stay in the social security system, email hr@gcmweb.org, notifying GCM of your decision in order to be eligible for the 7.65% Social Security Offset.
- If you decide to opt out of the social security system, send an email to hr@gcmweb.org stating that you are conscientiously opposed to public insurance as a minister.
- Complete a new Support Goal Worksheet
4. Research additional resources below or seek professional tax and financial advice if necessary.
Attached Resources:
- “Ministers and Social Security Tax” provided by: Evangelical Council for Financial Accountability. www.ECFA.org.
- “Ministers Opting Out of Social Security” provided by: Evangelical Council for Financial Accountability. www.ECFA.org.
- Excerpt from “Chapter 6 à Retirement and Social Security; Opting Out of Social Security” from 2012 Minister’s Tax & Financial Guide.
Reference to Additional Resources:
a. Church and Clergy Tax Guide by Richard R. Hammer.
Can be ordered through NACBA at 800-898-8085 or http://www.nacba.net
b. Income Tax Law for Ministers and Religious Workers by Worth Tax and Financial Service.
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- . They are located in Warsaw, Indiana.
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- IRS Publication 517, “Social Security and Other Information for Members of the Clergy and Religious Workers”
- Commissioned, Licensed and/or Ordained Minister Certificate Requirements
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