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The Tax Code does provide a means for some ministers in some denominations to exercise an option to terminate Social Security/Medi­care coverage for their ministerial earnings. IRS Form 4361 must be used, and it must be filed on the correct basis of religious belief. If approved by the IRS, only earnings from ministerial services are exempt from self-employment tax. Form 4361 indicates that once the exemption is approved, you cannot revoke it.

Use caution you must agree to the statement below when filing Form 4361:

“I certify that I am conscientiously opposed to, or be­cause of my religious principles I am opposed to, the ac­ceptance (for services I perform as a minister…) of any public insurance that makes payments in the event of death, disability, old age, or retirement; or that makes payments toward the cost of, or provides services for, medical care. (Public insurance includes insurance systems established by the Social Security Act).”
The Church of the Nazarene has one of the highest levels of participation in Social Security of any denomination of its size or larger. This has been true since the very earliest days of Social Security coverage for ministers. Most local Nazarene churches have a practice of reimbursing part, if not all, of the minister’s Social Security/Medicare tax, as well as that of lay staff. By practice and polity, there appears to be no basis for an exemption for Nazarene clergy from Social Security/Medicare self-employment taxes.

See also Memo #10 - Can Ministers Opt Out of Social Security?