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Refund of Incorrectly Withheld FICA Taxes from a Minister

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Question:

 A minister exempt from social security has an employer who withheld social security and Medicare taxes from of his paychecks. What does he do to get his money back?

 Answers (take your pick):

 1. If the employer is not a church or qualifying tax exempt organization, he does not get his money back. An exemption from social security and Medicare tax applies only to his ministerial income.

 2. If the employer is a church, then the church must file Form 941c to get the money back and then forward the minister's portion to him. It will also be necessary for the church to file corrected Forms W-2c and W-3c. A previous post today (and probably others earlier) explain that the churches may not withhold FICA taxes from a minister even if he requests it. The Internal Revenue Code clearly classifies a minister as self-employed for purposes of social security and Medicare tax matters.
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  1. Chris GastardiMarch 1, 2010 at 7:08 PM

    From 2007-2009 I served as a pastor full time on a church staff. In 2009 I received my approved 4361. For all of the Medicare and Social Security tax that I paid from 2007-2009, am I eligible to have it all refunded to me?

    ReplyDelete
  2. Corey PfaffeMarch 1, 2010 at 9:54 PM

    Apparently, your church erroneously failed to treat your salary as clergy compensation. It should not have withheld the 7.65% FICA tax (Medicare plus Social Security) and matched an equal amount out of the church budget. Instead, you were responsible for your own 15.3% self-employment tax. Had you filed and paid the SE tax, you could now request a refund.

    The only way to get this money back now is to have the church file corrected Forms W-2c, W-3c, and 941X.

    ReplyDelete
  3. Advance Student Ministry.ComMarch 2, 2010 at 9:47 AM

    It is my understanding that the church did match our social security. However, I did have FICA withheld until I was able to provide my approved 4361 which was in 2009. Does the 4361 retroactively cover the FICA I paid from 2007-2009? Everything I read says that what I paid should be refunded, just trying to seek clarity. Thanks for your help.

    ReplyDelete

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