A church has recently hired a minister who will also work 5-10 hours each week as the church's custodian. Are all of the minister's wages exempt from FICA? Are there any issues the church should consider when issuing the minister his W-2?
The church must understand that the minister is exempt from FICA taxes only for wages he earns performing ministerial duties.
A review of the definition of a minister is helpful. The Internal Revenue Service's Minister Audit Technique Guide states the following:
Treas. Reg. 1.1402(c)-5(b)(2) provides that service performed by a minister in the exercise of the ministry includes:
Ministration of sacerdotal functions;Conduct of religious worship;Control, conduct, and maintenance of religious organizations (including the religious boards, societies, and other integral agencies of such organizations), under the authority of a religious body consulting a church or denomination.If the minister performs other duties for the church tha…