Clergy Withholding and the new W-4

According to IRS rules, income tax withholding for ministers is voluntary.  If you do not complete a W-4 form, or if you indicate “exempt”, no federal tax will be withheld, and you should make quarterly estimated tax payments.  Alternatively, you can complete Form W-4 so that your employer withholds a sufficient amount to cover both income and SECA taxes. Form W-4 was recently updated, with significant changes.

To calculate the amounts for the new Form W-4, you may wish to use our spreadsheet, which always comes with the disclaimer that we are not CPAs, and that if you need accounting advice, you should contact a qualified accountant who is familiar with the unique requirements of clergy taxes.

For further information, see Publication 517, Social Security and Other Information for Members of the Clergy and Religious Workers.