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Clergy Tax Facts |
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Who is a Minister?
Ministers are individuals who are duly ordained, commissioned, or licensed by a religious body constituting a
church or church denomination. They are given the authority to conduct religious worship, perform sacerdotal functions, and administer ordinances or sacraments according to the prescribed tenets and practices of that church or denomination.
If a church or denomination ordains some ministers and licenses or commissions others, anyone licensed or commissioned must be able to perform substantially all the religious functions of an ordained minister to be treated as a minister for social security purposes.
The Tax Court ruled in 1987 that a minister is one who:
- administers sacraments
- conducts religious worship
- has management responsibility in a local church or religious denomination (control, conduct, or maintenance of a religious organization)
- is ordained, commissioned, or licensed, and
- is considered to be a religious leader by his or her church or denomination
In 1989, the Tax Court ruled that only the fourth factor is required (ordained, commissioned, or licensed) and that a balancing test should be applied with respect to the remaining four factors.
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Get a better understanding of U.S. tax laws as they relate to pastors and churches with the Church & Clergy Tax Guide |
Every church and its employees want to feel confident that their compensation plan is reasonable and fair. |
To accomplish your church's mission and vision for ministry you need to effectively manage your church's finances |
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Clergy should not view this information as a substitute for professional advice. This information is subject to change, due to administrative rulings or interpretations and or technical corrections by the IRS. If legal advice or other expert assistance is required, the services of a competent clergy tax professional person should be sought.
