What is the correct tax treatment for a minister of the gospel?
An employing agency of a minister of the gospel is to treat the minister as dual-status. This means the minister has 2 status’ and is considered both an employee and self-employed. 1) he is an employee for federal income tax purposes and receives a W-2 and 2) he is self-employed for Social Security and Medicare purposes and does not have Social Security or Medicare withheld nor matched on his wages.