Privileges of Ordained Ministers

Ordained or Called

Privileged communications is one of the most basic rights of ministers. While casual conversation is not covered, anytime a person seeks counseling with a minister, that conversation is protected. A minister cannot be required to divulge the contents unless the penitent agrees. The only exception to this privilege may be the obligation to report information about child abuse, depending on state laws. While this privileged relationship has historically required the minister to be ordained, an April 2013 ruling by a Kansas federal district court has softened that requirement. The court ruled that some of the privileges of an ordained minister could be extended to one who is called to the ministry without a formal ordination.

Privileges

As a member of the clergy, a minister has benefits not accorded to the laity. A minister can start his own congregation, conduct services, and officiate at weddings, baptisms, and funerals. Ministers are typically paid honorariums for providing these services. While you do not need to be a minister to produce religious media, being a member of the clergy gives you added status and credibility. Moreover, a minister can conduct services in any state with no restrictions. The only exception is Nevada, which requires that resident ministers have a congregation and non-residents obtain approval for each wedding officiated up to five per year.

Tax Treatment

Federal tax treatment for ministers' income is different from that of ordinary workers. Members of the clergy should consult a tax specialist for precise tax preparation. For income and retirement purposes, a minister's income is treated as if she is an employee of a church. For Social Security and Medicare tax purposes, the income is treated as if the minister is self-employed. While the self-employed have to pay what would ordinarily be the employer's contribution, ministers retain the privilege of opting out if they or their denomination is conscientiously opposed to public insurance, by filing Form 4361 and obtaining IRS approval.

A Place to Live

Many churches provide a parsonage or housing allowance for their ministers. As with earned income, housing is treated in different ways depending on the nature of the tax. For income tax purposes, a rental allowance or, if the church provides a parsonage, reasonable rental value can be deducted from taxable income, along with the expense of utilities. On the other hand, for Social Security and Medicare tax purposes, the fair rental value of the parsonage or housing allowance paid by the church is included as income.