Members of the Clergy

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Members of the Clergy

To claim the exemption from SE tax, you must meet all of the following conditions.

  • You file Form 4361, described later under Requesting Exemption—Form 4361 .

  • You are conscientiously opposed to public insurance because of your individual religious considerations (not because of your general conscience), or you are opposed because of the principles of your religious denomination.

  • You file for other than economic reasons.

  • You inform the ordaining, commissioning, or licensing body of your church or order that you are opposed to public insurance if you are a minister or a member of a religious order (other than a vow-of-poverty member). This requirement does not apply to Christian Science practitioners or readers.

  • You establish that the organization that ordained, commissioned, or licensed you, or your religious order, is a tax-exempt religious organization.

  • You establish that the organization is a church or a convention or association of churches.

  • You did not make an election discussed earlier under Who cannot be exempt .

  • You sign and return the statement the IRS mails to you to certify that you are requesting an exemption based on the grounds listed on the statement.

Requesting Exemption—Form 4361

To request exemption from SE tax, file Form 4361 in triplicate (original and two copies) with the IRS.

The IRS will return to you a copy of the Form 4361 that you filed indicating whether your exemption has been approved. If it is approved, keep the approved copy in your permanent records.

When to file. File Form 4361 by the date your income tax return is due, including extensions, for the second tax year in which you have net earnings from self-employment of at least $400. This rule applies if any part of your net earnings for each of the 2 years came from your services as a:
  • Minister,

  • Member of a religious order, or

  • Christian Science practitioner or reader.

The 2 years do not have to be consecutive tax years.

The approval process can take some time, so you should file Form 4361 as soon as possible.

Example 1.

Rev. Lawrence Jaeger, a clergyman ordained in 2012, has net self-employment earnings of $450 in 2012 and $500 in 2013. He must file his application for exemption by the due date, including extensions, for his 2013 income tax return. However, if Rev. Jaeger does not receive IRS approval for an exemption by April 15, 2014, his SE tax for 2013 is due by that date.

Example 2.

Rev. Louise Wolfe has $300 in net self-employment earnings as a minister in 2012, but earned more than $400 in 2011 and expects to earn more than $400 in 2013. She must file her application for exemption by the due date, including extensions, for her 2013 income tax return. However, if she does not receive IRS approval for an exemption by April 15, 2014, her SE tax for 2013 is due by that date.

Example 3.

In 2010, Rev. David Moss was ordained a minister and had $700 in net self-employment earnings as a minister. In 2011, he received $1,000 as a minister, but his related expenses were over $1,000. Therefore, he had no net self-employment earnings as a minister in 2011. Also in 2011, he opened a book store and had $8,000 in net self-employment earnings from the store. In 2012, he had net self-employment earnings of $1,500 as a minister and $10,000 net self-employment earnings from the store.

Rev. Moss had net earnings from self-employment in 2010 and 2012 that were $400 or more each year, and part of the self-employment earnings in each of those years was for his services as a minister, so he must file his application for exemption by the due date, including extensions, for his 2012 income tax return.

Death of individual. The right to file an application for exemption ends with an individual's death. A surviving spouse, executor, or administrator cannot file an exemption application for a deceased clergy member.

Effective date of exemption. An approved exemption is effective for all tax years after 1967 in which you have $400 or more of net earnings from self-employment and any part of those earnings is for services as a member of the clergy. Once the exemption is approved, it is irrevocable.

Example.

Rev. Trudy Austin, ordained in 2009, had $400 or more in net self-employment earnings as a minister in both 2009 and 2012. She files an application for exemption on February 20, 2013. If an exemption is granted, it is effective for 2009 and the following years.

Refunds of SE tax. If, after receiving an approved Form 4361, you find that you overpaid SE tax, you can file a claim for refund on Form 1040X before the period of time for filing ends. This is generally within 3 years from the date you filed the return or within 2 years from the date you paid the tax, whichever is later. A return you filed, or tax you paid, before the due date is considered to have been filed or paid on the due date.

If you file a claim after the 3-year period but within 2 years from the time you paid the tax, the credit or refund will not be more than the tax you paid within the 2 years immediately before you file the claim.