Is the housing allowance for a minister subject to FICA and Medicare?
The entire amount of a minister’s housing allowance is subject to social security and Medicare taxes, even though it may be excluded from your taxable income for income taxes. A minister’s compensation for services as an employee, as well as from self-employment, is subject to Self-Employment Contributions Act (SECA) taxes, not the Federal Insurance Contributions Act (FICA), which is characterized by wage withholding with the employer and employee each paying half of the taxes. However, if you are a duly ordained Commissioned, or licensed minister, or member of a religious order not under a vow of poverty, or a Christian Science Practitioner who elected and was approved for exemption from Social Security coverage and self-employment tax, your housing allowance would not be subject to social security or Medicare taxes under SECA.
