What does it mean to be a dual status employee?
A minister, per IRS regulations, is both an employee and
self-employed—dual status. As an employee, a minister is eligible for
all fringe benefits offered to non-minister employees — health coverage,
retirement plans and so on. The exception lies in social security and Medicare
tax. Non-minister employees must have 7.65% of their wages withheld to
pay for one half of their social security and Medicare taxes (it’s called FICA
tax). Their employers forward this withholding to the IRS along with a matching
7.65% — a total of 15.3%. As a minister employee serving church and other
ministry employers you must pay your own social security and Medicare taxes—all
of it, 15.3% (it’s called SECA tax).
This excerpt is a portion of our top 10 list for new ministers. If you would like to see all of the frequently asked questions ministers have you can visit this link.
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