| 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 |
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.
Read the ECFA Minister's Tax and Financial Guide.
https://www.fcmmbenefits.org/ministers-tax-financial-guide-2024-2023-tax-returns
- Ministers are granted the ability to seek an exemption from Social Security if they meet IRS requirements.
- An exemption results in ceasing contributions to and eligibility for both Social Security (government retirement protection as well as other assistance programs) and Medicare (government medical insurance for people with disabilities and people over 65).
- By default, ministers remain in the Social Security system and are required to continue making payments directly to the IRS for their Social Security/Medicare coverage (see details below).
Consult a tax professional.
Reliant is unable to offer tax advice for your specific situation, so we strongly encourage you to talk with a professional who is up-to-date on current practices and understands ministerial tax implications. You are eligible for taxable reimbursement of some tax preparation and advisory fees.
Tax options governed by the IRS and Social Security related to Parsonage (Minister's Housing Allowance) and Social Security Exemption are available to licensed/ordained/commissioned ministers. Know your reporting responsibility and the consequences of choosing these options.
Understand your IRS employment status related to your commissioned/ordained status.
The IRS classifies commissioned/ordained ministers into two categories:
- Related to Federal Income Tax, you are employed by Reliant. Reliant withholds and pays Federal Income Tax on your behalf and sends you a W-2.
- Related to Social Security and Medicare, you are self-employed. Reliant stops withholding FICA taxes and paying the employer portion on your behalf. FICA tax includes portions for Social Security and Medicare, and the tax rate is 15.3%, which you are still obligated to pay unless you receive an exemption from the government. If you participate in the Social Security system, you file SECA forms with your tax return.
Decide if you want to stay in the Social Security System.
If you decide to stay in the Social Security system, you are eligible to receive a 7.65% FICA bonus to offset your tax obligation for Social Security that was previously paid by Reliant. This bonus increases your monthly salary and is included in your monthly paycheck.
Remember, you must begin to pay your own Social Security/Medicare tax (now called SECA since you are considered self-employed) from the point in time that you are paid Reliant wages as a minister.
See Paying SECA Taxes for more information. Review Chapter 7 in Zondervan Minister's Tax and Financial Guide and research options for paying SECA to the IRS.
https://www.fcmmbenefits.org/ministers-tax-and-financial-guide-2023-2022-returns
File Form 4361 with the IRS. Reliant may request an electronic copy of the Minister's IRS-approved Form 4361 for our records as a safeguard for the employee and Reliant as an employer if ever needed by the IRS regarding the minister's tax status.
A minister is fully responsible for paying social security/medicare taxes (SECA) until the IRS sends a certificate verifying that the exemption request has been granted. See Claiming Exemption from Social Security Taxes for more information.
Understand and plan your Parsonage Allowance
Parsonage allowance, also called housing allowance, is one of several special tax benefits applied to qualified ministers. Read the following page to learn about parsonage and begin thinking about the amount you may wish to designate to parsonage: Parsonage.
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.
Email a copy of your certificate and let us know your tax decisions to payroll@reliant.org. A Reliant director will review the certificate. Once approved, you will be notified, and your tax settings will be changed.
If you inform us that you are staying in the Social Security system, you will receive a 7.65% FICA bonus to offset your tax obligation for Social Security that was previously paid by Reliant. This bonus increases your monthly salary and is included in your monthly paycheck.
Remember, you must begin to pay your own Social Security/Medicare tax (now called SECA since you are considered self-employed) from the point in time that you are paid Reliant wages as a minister.
See Paying SECA Taxes for more information. Review Chapter 7 in Zondervan Minister's Tax and Financial Guide and research options for paying SECA to the IRS.
https://www.fcmmbenefits.org/ministers-tax-financial-guide-2024-2023-tax-returnsIf you have an exemption from Social Security, email payroll@reliant.org stating, “I am exempt from the Social Security System because I am conscientiously opposed to receiving public insurance as a minister.”
This is the official statement employers are required to collect as an assurance that the minister is properly informing their employer, Reliant, of their tax decisions as a minister.
In some cases, Reliant may also request an electronic copy of the Minister's IRS-approved Form 4361 for our records. The collection of this form is a safeguard for the employee and Reliant as an employer, to ensure Reliant has an electronic copy saved to our records if ever needed as a part of interactions with the IRS regarding their minister's tax status.
Once you receive our email that your Certificate and tax decision has been processed, please submit a new Support Goal in TOOLBOX https://toolbox.reliant.org/account/sign-in?return=%2Fsupport-goals.
You will see your minister status reflected on your support goal. Make sure to select "no" to having opted out of Social Security.
You will see your minister status reflected on your support goal. Make sure to select "yes" to having opted out of Social Security.
Complete a Parsonage Request form if you wish to receive Minister's Housing Allowance (Parsonage).
Once your parsonage amount is approved, it becomes effective on the next applicable pay period. To change your parsonage amount in the future, complete a new Parsonage Request form and share it with payroll@reliant.org for approval. Dave Meldrum-Green, our director of Organizational Affairs & treasurer, reviews and approves all parsonage requests.
Reference Chapter 4 in Zondervan Minister's Tax and Financial Guide for details on Ministerial Housing Allowance.
https://www.fcmmbenefits.org/ministers-tax-financial-guide-2024-2023-tax-returnsContact your Program Team Liaison to submit a new job description reflecting your responsibilities as a commissioned or ordained minister.
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. They are located in Warsaw, Indiana.
- IRS Publication 517, “Social Security and Other Information for Members of the Clergy and Religious Workers”
- Commissioned, Licensed and/or Ordained Minister Certificate Requirements
Questions regarding commissioning, ordination, parsonage, FICA Bonuses? | |
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| Department | Employment Services |
