If you're a church employee and have self-employment income, you may need to identify any church employee earnings that can be deferred for Self-Employment (SE) tax purposes.
Understanding what qualifies as church employee income can help you enter the correct information and avoid reporting income incorrectly on your tax return.
Who Is Considered a Church Employee?
The IRS defines a church employee as an employee of a church or qualified church-controlled organization that has an approved exemption from employer Social Security and Medicare taxes.
For this purpose, a church employee does not include:
- Ministers
- Members of a religious order
- Christian Science practitioners
These individuals are generally subject to different tax rules.
What Earnings Should I Include?
Include:
- Church employee income reported on Schedule C, Line 31 (net profit from self-employment)
Do not include:
- Income reported on a Form W-2 when the Statutory Employee box is not checked
Regular W-2 wages are not considered church employee income for this entry, even if the wages were paid by a church or church organization.
Why This Matters
Church employees may be subject to unique Social Security and Medicare tax rules. Entering only qualifying church employee earnings helps ensure your self-employment tax is calculated correctly and prevents errors on your return.
If you're unsure whether your income qualifies, review how it was reported on your tax forms. In most cases, Schedule C income may qualify, while standard W-2 wages do not.