Is clergy income taxable for self employment?
Generally, earnings from services performed as a minister are subject to Self-Employment tax, However, if you filed form 4361 with the IRS indicating that you are opposed to public insurance due to your religious beliefs AND the IRS has approved your application, you are exempt from SE Tax.
When calculating your SE Tax, both your wages from services performed as a minister and your parsonage (if applicable) are included in the SE Tax calculation. When calculating your income tax, only your wages are used to figure your tax.
To complete your clergy SE Tax computations, go to:
- Federal Section
- Other Taxes
- Self-Employment Tax Schedule SE
- Check the box for clergy and indicate if you are exempt from SE Tax
- Complete the Clergy Tax-Free Income Worksheet (if you are not exempt from SE tax)