Ministers have Social Security tax ‘holiday’
GuideStone Financial Services
January 17, 2011

Ministers have Social Security tax ‘holiday’

Ministers have Social Security tax ‘holiday’
GuideStone Financial Services
January 17, 2011

DALLAS — Ministers for tax purposes will receive a small

financial benefit from the recent tax compromise legislation signed by

President Barack Obama December 17. Their SECA Social Security tax rate will

fall from 12.4 percent to 10.4 percent for 2011 only.

The additional Medicare

tax rate of 2.9 percent remains in effect. Ministers for tax purposes will see

their total SECA tax rate drop to 13.3 percent for 2011 only.

American workers in general will also receive a one-year 2

percent cut in their Social Security taxes under the Tax Relief Unemployment

Reauthorization and Job Creation Act of 2010. The bill — a compromise between

Republican congressional leaders and the White House — keeps the “Bush tax

cuts” in place through 2012. Additionally, it extends some unemployment

benefits and reduces the 6.2 percent OASDI (old age, survivors and disability

insurance) tax rate to 4.2 percent for 2011 only.

Ministers normally pay the 12.4 percent OASDI portion of

their SECA tax because of their “dual tax status” as self-employed for Social

Security tax purposes. The total OASDI portion of their SECA tax represents the

combined employer and employee OASDI tax rates.

The cut in Social Security taxes is for the 2011 tax year

only and will not impact any SECA taxes owed for income earned in 2010.

GuideStone will be releasing the annual Ministers Tax Guide

in February 2011, which provides specific information regarding ministers’

unique tax status as well as tips on filing a minister’s 2010 tax return. It

will be found online at www.GuideStone.org/taxguide, and participants can

request a free printed copy by calling GuideStone at (888) 984-8433. Orders can

be placed now for the tax guide, and they will be shipped once they are


For specific information regarding the 2011 Social Security

tax reduction, GuideStone encourages its participants to consult with a tax or

legal adviser who is versed in ministerial tax issues.

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