How a minister's income is taxed
If you are a minister of a church, your earnings for the services you perform in your capacity as a minister are subject to self-employment tax unless you have requested and received an exemption. (We'll cover the exemption process next.) This includes any salary that is paid to you as an employee of the church (even though reported on Form W-2, the church does not withhold Social Security or Medicare taxes), as well as offerings and fees such as those for performing marriages, funerals and baptisms.
To be treated as a minister, you must be duly ordained, commissioned or licensed by a church or church denomination and have the authority to conduct religious worship, perform sacerdotal functions and administer ordinances or sacraments. The same goes if you are a Christian Science practitioner or reader. Your earnings from services you performed are generally subject to self-employment tax, with one significant exception we'll discuss next.