CHURCH NOT REQUIRED TO WITHHOLD FICA TAXES
Church not required to withhold fica taxes. This is ongoing coverage of cases related to IRS issues that end up before Tax Court. In the case of Hermann Kuma v. greater New York Conference of Seventh Day Adventist Church et al, a former pastor was suing a church for failing to classify him as an employee and withhold Social Security and Medicare Taxes on the wages he was paid over a 21 year period. plaintiff, Hermann Kuma, brought this action against Defendants, Greater New York Conference of Seventh Day Adventist Church (GNYC), Henry Beras, Alonzo Smith, and Earl Knight, asserting breach of contract and negligence claims arising out of a dispute over tax withholding obligations under the Federal Insurance Contributions Act (FICA). Church not required to withhold fica taxes.
Plaintiff underwent extensive theological training in order to serve as a minister of the Seventh day Adventist Church. He was a pastor from 1996 to 2017. During Plaintiff’s tenure at GNYC: it classified him as an employee, issuing Plaintiff an “employee identification card” and W-2 forms, but not withholding FICA contributions on his behalf. Mr. Kuma was told when he attempted to apply for Social Security benefits that he did not have enough quarters of coverage on his account to qualify for benefits or to be eligible for Medicare. Mr. Kuma claimed that the Church and treated him improperly as an independent contractor, causing him to face the loss of benefits under Social Security and Medicare and was looking to be awarded damages in compensation. Oftentimes this causes a tax debt and the need for tax resolution services.
Mr. Kuma faced a problem because IRC Section 312 (b)(8)(a) states “services performed by a duly ordained, commissioned, or licensed minister of a church in the exercise of his ministry, or by a member of a religious order in thh exercise of duties required by such order”. The church was not required by the statute to withhold the FICA taxes and therefore the claim that Mr. Kuma was putting before the court was in direct conflict with the statute that the IRS specifically uses for ministers and the withholding of FICA taxes on earnings.