Randall Posted November 2, 2015 Report Posted November 2, 2015 Retired clergy, drawing social security. If he continues some part time work (ministerial) for the church and receives a housing allowance, is it still subject to SE tax? Seems like I looked into this in the past and saw a case but can't remember the outcome of the case. I'll look for that but thought I'd ask the forum if anyone knew off hand or had a reference lead. Quote
Jack from Ohio Posted November 2, 2015 Report Posted November 2, 2015 (edited) Retired clergy, drawing social security. If he continues some part time work (ministerial) for the church and receives a housing allowance, is it still subject to SE tax? Seems like I looked into this in the past and saw a case but can't remember the outcome of the case. I'll look for that but thought I'd ask the forum if anyone knew off hand or had a reference lead. Yes. All housing allowance is subject to SE. Any housing allowance amount greater than the fair rental value of his home is also subject to income tax. The fact that he is part time does not affect how these are calculated. Edited November 2, 2015 by Jack from Ohio spelling 1 Quote
JohnH Posted November 2, 2015 Report Posted November 2, 2015 I agree with Jack. If he is earning compensation for services, even if retired, then it is subject to SE tax (unless he has previously filed a 4361).You might be thinking of the fact that a retired minister can designate all or part of his retirement benefits as H&U allowance, up to the usual allowable limits. In that case, he can exclude the allowable amount from income, and since it is retirement income it is not subject to S/E tax. Quote
JohnH Posted November 2, 2015 Report Posted November 2, 2015 (edited) I let the previous post time out before I finished. If your client is working part-time, he should probably have his church(es) designate all payments to him as Housing & Utilities allowance. That gives him the ability to exclude it from income, but only up to the smaller of the amount actually designated, the amount actually spent, or the fair rental value of his home (including utilities, fully furnished, and with all maintenance & other expenses paid). Edited November 2, 2015 by JohnH 1 Quote
Randall Posted November 3, 2015 Author Report Posted November 3, 2015 Thanks for comments. JohnH, I was thinking of the retirement pension from a church that a part could be designated Housing Allow. Quote
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