Fema Employment
Tax question - ordained minister employed as spiritual advisor, has medicare/ss exemption?
Hi everybody, tax question for the experts here... I'm an ordained minister of a non-denominational group. As part of my religious calling I am directed to seek gainful employment in my community for: 1) providing spiritual guidance, counciling, and support for the community 2) helping others in the community as opportunity allows 3) providing sacrements and performing ceremonies as church law and state law allow 4) being an upstanding and respectable leader for the church community 5) earning wages through such employment, to provide for the needs of my family and myself As such, I am an assistant pastor in our small rural church, and I just became employed as 'religious advisor' at the local nursing home. As part of our religious doctrine members of the church body are directed to provide for each other in times of need and sickness, and support their elders in old age. Therefore, I filed an IRS form number 4361, rejecting any benefits from the social security or medicare programs. This was accepted by IRS and I've had no problems with taxes as the assistant pastor. The problem I'm having is with the taxes on the new job at the nursing home. I have no problem paying my federal and state employment taxes, but I believe the fica tax isn't supposed to be withheld from wages. Our religious grounds against social security is on the basis of recieving benefits, if I have to pay into this system then I'll do so, but as a practical matter those dollars would serve my family better in a retirement account. IRS form 4029 allows exemption from social security and medicare TAXES as well as a waiver of benefits. (I already waived benefits as a minister on form 4361 and am therefore exempt from self-employment taxes). The form 4029 does not allow me to file it because our church was founded after 1950. However the form also says 'if you already have approval for exemption from self-employment taxes, you are considered to have met the requirements for exemption from social security and medicare taxes on wages and do not need to file this form'. This means the nursing home shouldn't be withholding, correct? Part of the problem is that the nursing home doesn't have a 4029 on file, in fact, they're not a 'not-for-profit' at all. My employers accountant believes that they must have a 4029 also, else they have to withhold. She sent me to IRS publication 517, which is totally confusing. Is there a CPA out there who can straighten this up, or tell me where to look in the tax codes for more information? What forms does my employer need to properly figure the taxation? Do I need to pay my half of the social security/medicare tax? Do they need to pay the other half? Do they need to pay the other half, even if they don't withhold from me? Do they have to pay both halves if they don't withhold from me? Since its not a not-for-profit, how can I be sure they're not taking the funds out of my check, but turning around to the IRS and claiming the exemption, and pocketing the money? I guess to complicate matters the church body adheres to the principles of the first amendment, seperation of church and government. We are not incorporated under the state, do not enlist to voluntary categorization as a 503 entity with the IRS, and operate soley and sovereignly as a free church. Thanks for the update A M Frantz! :) I read that paragraph too, however part of our religious directive is to earn wages through community employment, to provide for our family, any employment is acceptable so long as it does not conflict with other religious tenants and provides such support. Therefore it is covered as valid, qualified, and church mandated.
Public Comments
- Your work for the nursing home job is a for profit institution and I assume isn't specifically work for your own church - that is, you perform counseling for both those who belong to your specific group and those of other faiths, and the counseling is not particularly directed at converting non-members. As such, I would say you are covered by the following paragraph in Pub 517: Services that are not part of your ministry. Income from services that are not qualified services is generally subject to social security and Medicare tax withholding (not self-employment tax) under the rules that apply to employees in general. The following are not qualified services: Services you perform for nonreligious organizations other than the services stated earlier. So I think you probably should be paying the FICA tax on your outside employment.
