TN 30 (08-05)

Citations:

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

Regulation No.4, Sec. 404.1024, 404.1046, and 404.1071(b)

A. Introduction

A member of a religious order who takes a vow of poverty does not report any income as SEI. To permit coverage for these members, the law provides an arrangement through which the order may deem itself to be the employer of its active members and report deemed wages for them.

B. Policy

1. General

Members’ services are covered only if the order, or an autonomous subdivision of the order, elects coverage.

2. Election of Coverage

The order elects coverage for all of its active members by filing a Certificate of Election of Coverage (Form SS-16) with the IRS. The order can elect coverage for certain vow-of-poverty members for a retroactive period up to 20 calendar quarters before the quarter in which the order files the certificate.

3. Deemed Wages

The order reports the fair market value of the food, lodging, clothing, and other perquisites (privileges) furnished to its members as deemed wages.

4. Coverage of Members’ Services

Services performed by all current and future active members of the order are covered. Services performed by members of religious orders working outside the U.S. are covered if:

• the order has elected coverage,

• the member is a U.S. citizen, or effective January 1, 1984, a resident alien, and

• the individual remains a member of the order even though his services may be directed by a third party outside the U.S., the right to direct and control remains with his order within the U.S.