Social Security taxes or contributions are collected under the Federal Insurance Contributions Act (FICA) and the Self-Employment Contributions Act (SECA). Many people refer to contributions to Social Security as either FICA or SECA taxes. Most employers and employees split the cost of Social Security contributions, often called FICA taxes. But self-employed taxpayers pay the full amount themselves and often call these SECA taxes.
Payment of Social Security taxes can be very confusing to churches and ministers because ministers are treated differently than other taxpayers. Unlike other taxpayers, ministers often have a dual tax status. They are employees for income tax purposes but for their ministerial earnings, they are always considered self-employed for Social Security. Unlike other taxpayers who are employees for income tax purposes, ministers must pay Social Security at the SECA tax rate. Their church employers don’t split the cost of Social Security contributions with them as they do for employees who aren’t ministers.
For more information, visit GuideStone.org/TaxGuide