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The IRS 4361 form plays a significant role for certain members of the clergy and religious workers, as it addresses the issue of self-employment tax exemption for designated religious services. This form allows individuals who meet specific criteria to apply for an exemption from paying Social Security and Medicare taxes on their earnings from religious functions. To qualify, applicants must adhere to doctrinal beliefs that prohibit them from accepting insurance benefits, which is a prerequisite for exemption. Completing the form requires an understanding of both the eligibility requirements and the proper submission processes to the IRS. In addition to the application, individuals must also be familiar with the implications of successfully obtaining the exemption, including potential impacts on retirement benefits. The benefits and responsibilities associated with this form call for careful consideration, making it essential for applicants to be well-informed before proceeding.

IRS 4361 Example

Form 4361

(Rev. January 2011)

Department of the Treasury

Internal Revenue Service

Application for Exemption From Self-Employment Tax for Use by Ministers, Members of Religious Orders and Christian Science Practitioners

OMB No. 1545-0074

File Original

and Two Copies

File original and two copies and attach supporting documents. This exemption is granted only if the IRS returns a copy to you marked “approved.”

or print

1 Name of taxpayer applying for exemption (as shown on Form 1040)

 

Number and street (including apt. no.)

 

type

 

 

 

 

Please

City or town, state, and ZIP code

 

 

 

 

 

 

 

2 Check one box:

Christian Science practitioner

Ordained minister, priest, rabbi

 

Member of religious order not under a vow of poverty

Commissioned or licensed minister (see line 6)

4Legal name of ordaining, licensing, or commissioning body or religious order

Number, street, and room or suite no.

City or town, state, and ZIP code

5Enter the first 2 years after the date shown on line 3 that you had net self-employment earnings of $400 or more, any of which came from services as a minister, priest, rabbi, etc.; member of a religious order; or

Christian Science practitioner

. . . . . . . . . . . . . . . . . . . . . .

Social security number

Telephone number (optional)

3Date ordained, licensed, etc. (Attach supporting document. See instructions.)

Employer identification number

6If you apply for the exemption as a licensed or commissioned minister and your denomination also ordains ministers, please indicate how your ecclesiastical powers differ from those of an ordained minister of your denomination. Attach a copy of your denomination’s bylaws relating to the powers of ordained, commissioned, and licensed ministers.

7I certify that I am conscientiously opposed to, or because of my religious principles I am opposed to, the acceptance (for services I perform as a minister, member of a religious order not under a vow of poverty, or Christian Science practitioner) of any public insurance that makes payments in the event of death, disability, old age, or retirement; or that makes payments toward the cost of, or provides services for, medical care. (Public insurance includes insurance systems established by the Social Security Act.)

I certify that as a duly ordained, commissioned, or licensed minister of a church or a member of a religious order not under a vow of poverty, I have informed the ordaining, commissioning, or licensing body of my church or order that I am conscientiously opposed to, or because of religious principles I am opposed to, the acceptance (for services I perform as a minister or as a member of a religious order) of any public insurance that makes payments in the event of death, disability, old age, or retirement; or that makes payments toward the cost of, or provides services for, medical care, including the benefits of any insurance system established by the Social Security Act.

I certify that I have never filed Form 2031 to revoke a previous exemption from social security coverage on earnings as a minister, member of a religious order not under a vow of poverty, or Christian Science practitioner.

I request to be exempted from paying self-employment tax on my earnings from services as a minister, member of a religious order not under a vow of poverty, or Christian Science practitioner, under section 1402(e) of the Internal Revenue Code. I understand that the exemption, if granted, will apply only to these earnings. Under penalties of perjury, I declare that I have examined this application and to the best of my knowledge and belief, it is true and correct.

Signature

Date

Caution: Form 4361 is not proof of the right to an exemption from federal income tax withholding or social security tax, the right to a parsonage allowance exclusion (section 107 of the Internal Revenue Code), assignment by your religious superiors to a particular job, or the exemption or church status of the ordaining, licensing, or commissioning body, or religious order.

For Internal Revenue Service Use

Approved for exemption from self-employment tax on ministerial earnings

Disapproved for exemption from self-employment tax on ministerial earnings

By

(Director’s signature)

(Date)

 

 

General Instructions

Section references are to the Internal Revenue Code unless otherwise noted.

Purpose of form. File Form 4361 to apply for an exemption from self-employment tax if you have ministerial earnings (defined later) and are:

An ordained, commissioned, or licensed minister of a church;

A member of a religious order who has not taken a vow of poverty; or

A Christian Science practitioner.

Note. If you are a commissioned or licensed minister of a religious denomination or church that ordains its ministers, you may be treated in the same manner as an ordained minister if you perform substantially all the religious functions within the scope of the tenets and practices of your religious denomination or church.

This application must be based on your religious or conscientious opposition to the acceptance (for services performed as a minister, member of a religious order not under a vow of poverty, or Christian Science practitioner) of any public insurance that makes payments for

death, disability, old age, or retirement; or that makes payments for the cost of, or provides services for, medical care, including any insurance benefits established by the Social Security Act.

If you are a duly ordained, commissioned, or licensed minister of a church or a member of a religious order not under a vow of poverty, prior to filing this form you must inform the ordaining, commissioning, or licensing body of your church or order that, on religious or conscientious grounds, you are opposed to the acceptance of public insurance benefits based on ministerial service.

For Privacy Act and Paperwork Reduction Act Notice, see page 2

Cat. No. 41586H

Form 4361 (Rev. 1-2011)

Form 4361 (Rev. 1-2011)

Page 2

Ministerial service, in general, is the service you perform in the exercise of your ministry, in the exercise of the duties required by your religious order, or in the exercise of your profession as a Christian Science pracitioner. Ministerial earnings are the self-employment earnings that result from such service. See Pub. 517 for details.

Do not file Form 4361 if:

You ever filed Form 2031, Revocation of Exemption From Self-Employment Tax for Use by Ministers, Members of Religious Orders, and Christian Science Practitioners; or

You belong to a religious order and took a vow of poverty. You are automatically exempt from self-employment tax on earnings for services you perform for your church or its agencies. No tax exemption applies to earnings for services you perform for any other organization.

Additional information. See Pub. 517, Social Security and Other Information for Members of the Clergy and Religious Workers.

When to file. File Form 4361 by the due date, including extensions, of your tax return for the second tax year in which you had at least $400 of net earnings from self-employment, any of which came from ministerial services.

Effective date of exemption. An exemption from self-employment tax is effective for all tax years ending after 1967 in which you have net self-employment earnings of $400 or more if you receive any of it from ministerial services. For example, if you had qualified net earnings of $400 or more in 2008 and not again until 2010, a valid Form 4361 filed by April 15, 2011, would apply to 2008 and all later years. See Pub. 517 to find out if you are entitled to a refund of self- employment tax paid in earlier years.

Where to file. Mail the original and two copies of this form to: Department of the Treasury, Internal Revenue Service Center, Philadelphia, PA 19255-0733.

Approval of application. Before your application can be approved, the IRS must verify that you are aware of the grounds for exemption and that you want the exemption on that basis. When your completed Form 4361 is received, the IRS will mail you a statement that describes the grounds for receiving an exemption under section 1402(e). You must certify that you have read the statement and seek exemption on the grounds listed on the statement. The certification must be made by signing a copy of the statement under penalties of perjury and mailing it to the IRS not later than 90 days after the date the statement was mailed to you. If it is not mailed by that time, your exemption will not be effective until the date the signed copy is received by the IRS.

If your application is approved, a copy of Form 4361 will be returned to you marked “approved.” Keep this copy of Form 4361 for your permanent records. Once the exemption is approved, you cannot revoke it.

Exempt earnings. Only earnings from ministerial services (ministerial earnings) are exempt from self-employment tax.

Conducting religious worship services or ministering sacerdotal functions are ministerial services whether or not performed for a religious organization.

Ministerial services also include controlling, conducting, and maintaining religious organizations (including religious boards,

societies, and other agencies integral to these organizations) under the authority of a church or church denomination.

If your church assigns or designates you to perform services for an organization that is neither a religious organization nor an integral agency of a religious organization, you are performing ministerial services even though they may not involve conducting religious worship or ministering sacerdotal functions. Your services are ordinarily not considered assigned or designated by your church if any of the following is true.

The organization for which you perform the services did not arrange with your church for your services.

You perform the same services for the organization as other employees not designated as you were.

You perform the same services before and after the designation.

Nonexempt earnings. Exemption from self- employment tax does not apply to earnings from services that are not ministerial.

Earnings from the following entities are not exempt even if religious services are conducted or sacerdotal functions are ministered: the United States; a state, territory, or possession of the United States; the District of Columbia; a foreign government; or a subdivision of any of these bodies. For example, chaplains in the U.S. Armed Forces are considered commissioned officers, not ministers. Similarly, chaplains in state prisons or universities are considered civil servants.

Indicating exemption on Form 1040. If the IRS returns your application marked “approved” and your only self-employment income was from ministerial services, enter “Exempt—Form 4361” on the self-employment tax line in the Other Taxes section of Form 1040. If you had other self-employment income, see Schedule SE (Form 1040).

Specific Instructions

Line 3. Enter the date you were ordained, commissioned, or licensed as a minister of a church; became a member of a religious order; or began practice as a Christian Science practitioner. Do not file Form 4361 before this date. Attach a copy of the certificate (or, if you did not receive one, a letter from the governing body of your church) that establishes your status as an ordained, commissioned, or licensed minister; a member of a religious order; or a Christian Science practitioner.

Line 4. If you are a minister or belong to a religious order, enter the legal name, address, and employer identification number of the denomination that ordained, commissioned, or licensed you, or the order to which you belong. Get the employer identification number from your church or order.

You must be able to show that the body that

ordained, commissioned, or licensed you, or your religious order, is exempt from federal income tax under section 501(a) as a religious organization described in section 501(c)(3). You must also be able to show that the body is a church (or convention or association of churches) described in section 170(b)(1)(A)(i). To assist the IRS in processing your application, you can attach a copy of the exemption letter issued to the organization by the IRS. If that is not

available, you can attach a letter signed by an individual authorized to act for the organization stating that the organization meets both of the above requirements.

Privacy Act and Paperwork Reduction Act Notice. We ask for the information on this form to carry out the Internal Revenue laws of the United States. We need this information to ensure that you are complying with these laws and to allow us to figure and collect the right amount of tax. Applying for an exemption from self-employment tax is voluntary. However, providing the requested information is mandatory if you apply for the exemption. Our legal right to ask for the information requested on this form is Internal Revenue Code sections 1402(e), 6001, 6011, 6012(a), and 6109 and their regulations. Code section 6109 requires that you provide your social security number on what you file. If you fail to provide all or part of the information requested on Form 4361, your application may be denied. If you provide false or fraudulent information, you may be subject to penalties.

You are not required to provide the information requested on a form that is subject to the Paperwork Reduction Act unless the form displays a valid OMB control number. Books or records relating to a form or its instructions must be retained as long as their contents may become material in the administration of any Internal Revenue law.

Generally, tax returns and return information are confidential, as stated in section 6103. However, section 6103 allows or requires the Internal Revenue Service to disclose or give the information shown on your tax return to others as described in the Code. We may disclose this information to the Social Security Administration for administration of the exemption, to the Department of Justice to enforce civil and criminal tax laws, and to cities, states, the District of Columbia, and U.S. commonwealths or possessions to administer their tax laws. We may also disclose this information to other countries under a tax treaty, to federal and state agencies to enforce federal nontax criminal laws, and to federal law enforcement and intelligence agencies to combat terrorism.

Please keep this notice with your records. It may help you if we ask you for other information. If you have any questions about the rules for filing and giving information, please call or visit any Internal Revenue Service office.

The average time and expenses required to complete and file this form will vary depending on individual circumstances. For the estimated averages, see the instructions for your income tax return.

If you have suggestions for making this form simpler, we would be happy to hear from you. You can write to the Internal Revenue Service, Tax Products Coordinating Committee, SE:W:CAR:MP:T:T:SP, 1111 Constitution Avenue, NW, IR-6526, Washington, DC 20224. Do not send the form to this address. Instead, see Where to file on this page.

File Breakdown

Fact Name Details
Form Title Application for Exemption From Self-Employment Tax for Use by Ministers.
Purpose This form allows ministers to apply for an exemption from self-employment tax on their ministerial income.
Eligibility Ministers who believe their services are not subject to self-employment tax may apply.
Filing Deadline The form must be filed by the due date of the tax return for the year in which the exemption is requested.
Other Filing Requirements The applicant must also file Form 1040 and indicate the exemption on the return.
Location to File Send the completed form to the IRS address specified in the form instructions.
State-Specific Considerations Consult state laws regarding self-employment tax as they may differ; reference individual state tax codes.
Approval Notification The IRS will notify the individual once the application has been processed.
Revocation of Exemption Ministers can revoke the exemption by submitting a written request to the IRS.

Guide to Using IRS 4361

Filling out the IRS 4361 form requires careful attention to detail. Completing this form accurately is essential to ensure that your request is processed effectively. The following steps outline the necessary actions to fill out the form correctly.

  1. Download the IRS 4361 form from the official IRS website or obtain a copy through other authorized channels.
  2. Read the instructions carefully before you begin filling out the form to understand the requirements.
  3. Provide your personal information in the designated areas, including your name, address, and Social Security number.
  4. Indicate your reason for filing the form in the specified section. Be concise and clear in your explanation.
  5. Complete all remaining sections of the form as applicable, providing detailed and accurate information as required.
  6. Review the form thoroughly to ensure that all information is correct and complete, eliminating any potential errors.
  7. Sign and date the form in the appropriate section to certify its accuracy.
  8. Make a copy of the completed form for your records before submitting it.
  9. Submit the form to the appropriate IRS address based on your location, as indicated in the form instructions.

Once you have submitted the completed IRS 4361 form, keep an eye out for any communication from the IRS regarding your request. It is advisable to maintain a record of your submission until you receive confirmation or further instructions.

Get Answers on IRS 4361

What is IRS Form 4361?

IRS Form 4361 is used by self-employed ministers and members of religious orders to apply for an exemption from self-employment tax on their ministerial income. This form is specifically designed for those who adhere to certain religious beliefs that oppose participation in social security, including the payment of self-employment taxes.

Who can file Form 4361?

To be eligible to file Form 4361, you must be a minister or a member of a religious order who is self-employed. Moreover, your religious convictions must guide your decision to not participate in Social Security. It is important to note that not all ministers may qualify, as specific criteria must be met.

What are the requirements to qualify for an exemption?

To qualify for an exemption from self-employment tax, you must meet the following criteria:

  1. Be a duly ordained, commissioned, or licensed minister of a church.
  2. Follow a religious belief that opposes receiving social security benefits.
  3. File your Form 4361 within the appropriate time frame, usually within two years from the date you became self-employed.

How do I fill out Form 4361?

Filling out Form 4361 involves several steps:

  • Provide your personal information, including your name and social security number.
  • Indicate your religious affiliation and describe your beliefs regarding social security.
  • Sign and date the form to certify your request for exemption.

Always ensure that the information provided is accurate and up-to-date to avoid delays in processing.

When is the deadline for submitting Form 4361?

The deadline for submitting Form 4361 is generally two years from the first day of the year in which you had self-employment income. To avoid any complications, it’s advisable to submit the form as soon as you determine your eligibility for the exemption. Be mindful of specific due dates to ensure compliance.

What happens after I submit Form 4361?

Upon submitting Form 4361, the IRS will review your application. You will receive a determination letter indicating whether your exemption request has been accepted or denied. If it is approved, you will be exempt from self-employment tax on your ministerial income going forward. Be sure to keep a copy of your determination letter for your records.

Can I appeal if my exemption is denied?

If the IRS denies your exemption request, you have the right to appeal the decision. You can do this by contacting the IRS and requesting a reconsideration of your case. It may be beneficial to seek legal or tax advice to navigate the appeals process effectively.

Where can I find additional resources about Form 4361?

For more information about IRS Form 4361, you can visit the official IRS website. There, you will find additional resources, including instructions for completion and FAQs. It might also be helpful to consult a tax professional to guide you through the form and its implications for your financial situation.

Common mistakes

Filling out the IRS Form 4361 can be a complex process, and mistakes can lead to significant issues for individuals seeking religious exemption from self-employment tax. One common mistake is failing to check the appropriate boxes. The form contains specific sections that require the taxpayer to indicate their eligibility for the exemption. Neglecting to complete these sections accurately can lead to the rejection of the application.

Another frequent error involves not providing thorough explanations of religious beliefs. The IRS requires a clear description of the religious tenets or practices that support the request for exemption. Without a detailed and coherent explanation, the form may be deemed insufficient, resulting in delays or denials.

Many individuals overlook the importance of documenting their religious status. The IRS may ask for proof of membership in a recognized religious organization. Failing to attach required documentation can hinder the approval process, creating unnecessary obstacles. Keep in mind that supporting evidence is a critical component of a successful application.

Some people miscalculate deadlines as well. The IRS has specific due dates for submitting Form 4361. Late submissions could jeopardize one’s eligibility for exemption, leading to unexpected tax liabilities. It's essential to be aware of these timelines and to prepare the form well in advance of the deadline.

Providing incorrect or outdated personal information is another mistake that can complicate matters. Ensuring that all contact details, such as name, address, and Social Security number, are correct and current is crucial. Errors in this information can result in processing delays and communication issues with the IRS.

Lastly, individuals often forget to keep copies of the completed form and any submitted documents. Having a personal record can be invaluable, particularly if questions arise in the future. Retaining a copy serves as a reference point and can help when addressing IRS inquiries or if the exemption is contested.

Documents used along the form

When navigating the complexities of tax-exempt status for ministers, various forms and documents may accompany the IRS Form 4361. Each serves a unique purpose in ensuring compliance and clarity in the tax process. Below is a list of important forms that may be utilized alongside Form 4361.

  • Form 1040: This is the standard individual income tax return form that most taxpayers use to report their annual income. For ministers, it's vital for detailing both taxable and non-taxable income.
  • Form 4361 Instructions: These include detailed guidance on how to properly fill out Form 4361. Understanding the instructions can help in accurately completing the form and complying with IRS requirements.
  • Form 941: This is used to report income taxes, social security tax, and Medicare tax withheld from employees' paychecks. Since ministers can be considered self-employed for tax purposes, these documents help clarify tax obligations.
  • Form W-2: This form reports annual wages and the amount of taxes withheld from an employee's paycheck. If a minister receives a salary, this form is essential for reporting income accurately.
  • Form W-4: This form is used by employees to indicate their tax situation to their employer. It helps in determining the amount of federal income tax withholding from paychecks.
  • Schedule C (Form 1040): This is used to report income or loss from a business operated as a sole proprietorship. Ministers may need it to declare any self-employment income earned outside of their church.
  • Form 990: For tax-exempt organizations, this form provides the IRS with financial information. Some congregations may need to file this if they are recognized as tax-exempt entities.
  • Form 2553: This form is used for entities that wish to elect to be taxed as S corporations. Although not specific to self-employment for ministers, it may be relevant if the minister works through a church-run business entity.

Understanding these forms and their purposes is key to effectively managing ministerial finances. Proper preparation and timely submission can help avoid complications with the IRS, allowing ministers to focus on their service and responsibilities.

Similar forms

The IRS Form 4361 is a request for exemption from self-employment tax for ministers and members of certain religious orders. This form serves a specific purpose, but there are other IRS documents that share similarities in intent and function. Below are five documents that relate to the IRS 4361 form:

  • IRS Form 1040: This is the standard individual income tax return form. Like Form 4361, it is used by individuals to report income and claim exemptions, allowing taxpayers to outline their tax liabilities in a clear structure.
  • IRS Form exempt: This form allows organizations to apply for recognition of tax-exempt status. Similar to Form 4361, it deals with exemptions, but focuses on non-profit establishments rather than individuals.
  • IRS Form 966: This form is used by corporations to report corporate dissolution or liquidation. It parallels Form 4361 in that both serve to formally document and signify a specific tax status or exemption for their respective taxpayer categories.
  • IRS Form 2553: This is used by eligible small businesses to elect S corporation status. Both Forms 4361 and 2553 enable taxpayers to assert a specific tax standing in hopes of benefiting from favorable tax treatment.
  • IRS Form W-4: This form is used by employees to inform their employer of the amount of tax to withhold from their paycheck. While targeting employment scenarios, like Form 4361, it influences how taxes are managed based on individual circumstances.

Dos and Don'ts

When filling out IRS Form 4361, it is essential to follow certain best practices while avoiding common pitfalls. Adhering to guidelines helps ensure accuracy and compliance.

  • Do: Read the instructions carefully before starting to fill out the form.
  • Do: Ensure that you meet all the eligibility requirements for exemption before submitting the form.
  • Do: Provide accurate and complete information to avoid processing delays.
  • Do: Keep a copy of the form for your records after submission.
  • Don't: Forget to sign and date the form; an unsigned form will not be accepted.
  • Don't: Submit the form after the deadline, as it may affect your ability to claim exemption in the future.

Misconceptions

  • Misconception 1: The IRS 4361 form is only for clergy.
  • While the IRS 4361 form is often associated with religious leaders, it is not exclusively for clergy. It is designed for any individual who is a minister or a member of a religious order that has taken a vow of poverty. Therefore, various professionals within religious organizations can apply.

  • Misconception 2: Filing the IRS 4361 form guarantees tax exemption.
  • Filing the form does not automatically lead to tax-exempt status. It simply requests an exemption from self-employment tax for ministers and similar individuals. Each case is examined on its own merits, and eligibility is based on specific criteria outlined in IRS regulations.

  • Misconception 3: If I don’t file the form, I will be penalized.
  • Failure to file the IRS 4361 form does not incur a penalty if tax exemption is not being sought. However, individuals who qualify and wish to opt-out of self-employment tax should file the form to formalize their exemption.

  • Misconception 4: The IRS 4361 form is a one-time requirement.
  • This form may need to be filed every year if an individual's eligibility changes. Changes in circumstances, such as transitioning to a taxable position or ceasing to meet the requirements, can affect one's status. Constant awareness of eligibility is important.

  • Misconception 5: The IRS will automatically grant exemption upon submission of the form.
  • Submission of the IRS 4361 form does not equate to automatic approval. Each application undergoes review, and applicants must meet the criteria set forth by the IRS. Receipt of the form does not imply that an individual is exempt until a formal determination is made.

Key takeaways

When it comes to the IRS 4361 form, there are several important points to keep in mind. Here are six key takeaways to guide you through the process.

  1. Eligibility Requirements: Only certain religious leaders and members of religious groups may qualify to use this form. Make sure you meet the specific criteria outlined by the IRS.
  2. Exemption from Self-Employment Tax: Properly filing Form 4361 allows eligible individuals to request an exemption from self-employment tax on their ministerial income.
  3. Deadline for Filing: The form must be submitted within two years of the first religious employment. Timeliness is crucial to securing your exemption.
  4. Complete and Accurate Information: Fill out the form carefully. Incomplete or inaccurate information could lead to delays or denial of your request.
  5. IRS Review Process: After submission, the IRS will review your application. Be prepared to address any questions or provide additional documentation if necessary.
  6. Annual Updates Required: If your status changes or if you're no longer eligible, you must communicate this to the IRS. Otherwise, your exemption may be revoked.

Understanding these key aspects will help ensure a smooth application process for the IRS 4361 form and will maximize the chances of securing an exemption from self-employment tax.