Special rules apply to payments you make to ministers.
The definition of a minister can be complex.
See Publication 517, Social Security and Other Information for Members of the Clergy and Religious Workers for a more detailed definition.
Wages you pay for services performed in the exercise of their ministry are not subject to income tax withholding or to social security and Medicare taxes.
The earnings are, however, subject to self-employment tax and income tax and are paid by the minister.
You and the minister can agree to voluntarily withhold income tax to cover the minister's liability for self-employment tax and income tax.
Keep in mind a minister may have applied for and received an exemption from self-employment tax.
You'll want to check out publication 517 for information on this exception.
For resources discussed in each lesson, please visit the Lesson 10 Supplement.
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