TN 30 (08-05)

Citations:

Social Security Act, Section 210(a)(8)(A);

Regulation No.4, Sec. 404.1023

A. Description of Terms

1. Ordained, Licensed or Commissioned

This term describes procedures followed by recognized churches or church denominations to vest ministerial status on individuals who meet the requirements of the church.

2. In the Exercise of His or Her Ministry

This term is described in the following manner:

1. The conduct of religious worship and the ministration of sacerdotal functions (relating to or characteristic of a priest or the priesthood). The tenets and practices of the religious body constituting the church or church denomination determine these functions and duties.

2. Service performed in the control, conduct, and maintenance of a religious organization under the authority of a religious body constituting a church or church denomination. Such a religious organization includes an integral agency of a religious organization.

   These services relate directly to directing, managing, or promoting the activities of the organization.

3. Service of a type described in RS 01901.600A.2.b., performed for an organization that is neither:

   • a religious body constituting a church or church denomination; nor

   • an organization operated as an integral agency of such a religious organization when service is performed as “assignment or designation” by the church or church denomination.

REMINDER: “Assignment or designation” does not include routine assistance given to the minister seeking a new position of service.

3. Not in the Exercise of His or Her Ministry

Service as a chaplain is not considered being in the exercise of the ministry when performed:

• in the Armed Forces, such as performed as an officer in the uniformed service; or

• a governmental (Federal, State or local) entity, such as performed as a civil servant.

• in a government-owned and operated hospital (However, services at a church-related hospital or health and welfare institution, or a private nonprofit hospital are considered to be part of the ministry and are considered qualifying services.)

4. In Exercise of Duties Required by the Order

Generally, any duty required by the order, not including service performed in an employment relationship with a third party not affiliated with the order or its supervisory church, is considered to be in the exercise of duties required by the order.

B. Policy--Services

1. Services Excluded from Employment

Services performed by ministers and members of religious orders who are not under a vow of poverty have always been excluded from coverage as employment when performed as:

• a duly ordained, commissioned, or licensed minister of a church performing service in the exercise of his ministry, or

• a member of a religious order in the exercise of the duties required by the order.

2. Coverage for Ministerial Services

Services performed by ministers are deemed to be self-employment for Social Security coverage purposes, unless the minister has timely applied for and received an exemption from SECA (Self-Employment Contributions Act) taxes.

However, ministers receive Form W-2 (Wage and Tax Statement) from the church, order, or other employer for which they perform services. The Form W-2 should not show Social Security and Medicare wages or taxes.

NOTE: When the income for ministers is posted to the Master Earnings File as both self-employment earnings and non-covered wages, a special payment also must be posted. See RS 02505.120D.

3. Chaplains

1. Service of chaplains in the Uniformed Services is covered since 01/01/57.

2. Service performed by a duly ordained, commissioned, or licensed minister as a chaplain for a privately owned and operated organization is excepted from employment. The chaplain is deemed to be self-employed.

3. Service performed by a duly ordained, commissioned, or licensed minister as a chaplain in the employ of the U.S., (including the Armed Services), wholly owned instrumentality of the U.S., the District of Columbia, a State or local governmental entity, a foreign government, or any of their political subdivisions, is not considered in the exercise of the ministry. Rather, it is considered work performed in the employ of the appropriate governmental entity and is employment for Social Security purposes.

4. Status of Other Individuals as Ministers

a. Christian Science practitioners and readers

Christian Science practitioners and readers have the status of ordained, commissioned or licensed ministers and are deemed to be self-employed.

b. Rabbis and cantors

Rabbis and cantors are considered ordained ministers and are deemed to be self-employed.

Effective 01/01/82, a cantor is treated as an ordained minister if the cantor and the congregation agree on the relationship.

c. Salvation Army officers

Salvation Army officers are considered commissioned officers. This is equivalent to ordained ministers.

d. Service of missionaries, domestic or foreign

Service of missionaries, domestic or foreign, when performed by a duly ordained, commissioned, or licensed minister for that missionary organization is excluded from employment and is deemed to be self-employment.

Even though a missionary organization may not meet the definition of a church or religious order, the service is still excluded as service in the exercise of the ministry.

C. References

• RS 01802.060, Covered self-employment ministerial services.

• RS 01803.251-RS 01803.253, Computing NESE for ministers.

• RS 01901.640, Vow of poverty.

• IRS Publication 517, Social Security and Other Information for Members of the Clergy and Religious Workers http://www.irs.gov/pub/irs-pdf/p517.pdf

• IRS Publication 1828, Tax Guide for Churches and Religious Organizations http://www.irs.gov/pub/irs-pdf/p1828.pdf