If you work for the church, is your paycheck taxed?

Question

i know if the church makes a purchase they do not pay taxes because of the "seperation of church and state" but what about paid employees? do they pay any taxes? do they just pay federal?

Answer 1

Well most of the time if you work at a church you are a volunteer. My cousin is "the chair" of the cousel at a church and he has to pay taxes, because it is just volunteer.

Answer 2

Church employees, including some but not all clergy, pay the same taxes as any other job.

Answer 3

Employees of 501(c)(3) organizations are treated exactly the same as other employees--their income is taxed, and they have to pay FICA, state, and any local taxes.  The employer 501(c)(3) is also required to withhold from pay exactly like any other employer.  

The reason for this is that, while the church itself is entitled to exemption from taxes, the employee of the church is merely doing what all employees do--working in return for compensation.  You're not donating anything to the church by working for it in return for pay.  

A Florida pastor by the name of Kent Hovind tried to argue, among other things, that employees of his organization (including his wife) should not be liable for taxes and he should not be liable for employer withholding.  Kent Hovind is now in federal prison.

Answer 4

Churches don't pay taxes because they're registered non-profit organizations, not because some idea of "separation of church and state".

Employees still need to pay income taxes, no matter where their income comes from.

Answer 5

Everyone who works is taxed...

Churches are "tax Exempt" because they are a "Charitable Organization"

Local governments are tax exempt too...

There is no legal documentation for "seperation of church and state"

Answer 6

A church can elect to be exempt from FICA taxes (social security and medicare) on the paychecks they give their employees.  Church employees in this situation pay self-employment taxes using form SE.  These employees pay both sides of the FICA taxes.  From a legal standpoint, these employees are still an employee (not a contractor), and they do NOT use schedule C to report their church income.

Some churches choose to withhold FICA.  If they do this, 7.65% is withheld for FICA, and the also pays in 7.65% of the wages (the matching portion).

A licensed or ordained minister can elect to be exempt from social security.  These ministers do not have FICA taxes withheld from their checks, and they do not have to pay self-employment tax.

In all these cases, the income by church employees is subject to federal income tax, and the church can and should withhold federal taxes from the paychecks they issue.

See discussion at:

http://www.irs.gov/publications/p517/ar0...

Answer 7

It really depends on your position, but more often than not (unless you are a priest or a nun) yes, you do pay taxes.

Answer 8

of course no one is exempt