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Which tax reporting form should I use?

Ministers have a dual tax status. For federal reporting purposes they are considered employees, but for Social Security they are considered to be self-employed with regard to services performed in the exercise of ministry. The IRS instructs employers to use Form W-2 to report an employee’s taxable income from a church, not Form 1099-MISC.

  • Form 1099-MISC is for self-employed workers. Ministers are considered self-employed for Social Security/Medicare tax purposes only, not for federal income tax purposes.
  • If you use Form 1099-MISC, employer premiums paid for benefits, including benefit plans administered by MMBB, must be reported as taxable income.
  • The employee’s chances of being audited increase dramatically when Form 1099-MISC is used.