When is a CMC a minister for tax purposes?
According to our Book of Discipline, CMCs are officially “Assistant to the Pastor” (unless they are in the role of lead or solo pastor, in which case they are the pastor). CMCs can also perform pastoral “sacerdotal” functions (wedding, communion, etc) with permission of the Superintendent. What does this mean for our CMCs? (Thanks to our FMC COO Michael Forney for the information below):
In IRS Publication 517 (2023), CMCs in church employ may be considered ministers and could be eligible for housing allowance depending on their role.
IRS Publication 517 (2023) provides the following guidance: “Ministers defined. Ministers are individuals who are duly ordained, commissioned, or licensed by a religious body constituting a church or church denomination. Ministers have the authority to conduct religious worship, perform sacerdotal functions, and administer ordinances or sacraments according to the prescribed tenets and practices of that church or denomination. If a church or denomination ordains some ministers and licenses or commissions others, anyone licensed or commissioned must be able to perform substantially all the religious functions of an ordained minister to be treated as a minister for social security purposes.”
CMCs in the employ of a church who function in either ministerial staff roles with freedom of action, ministerial leadership roles, or lead pastor roles would be eligible for housing allowance. (quick test: are they ready to preach? serve communion? handle a wedding or funeral? If they are, then I give them permission to do so, and they are eligible for housing allowance).
CMCs who are not serving in those capacities could be seen as not eligible because of BOD restrictions upon their freedom to conduct those functions without specific elder authorization. (So, if you have a CMC who is not yet serving in a ministerial leadership capacity, they are not eligible for housing allowance.).
Remember: Any housing allowance must be designated in board minutes, and it can only be designated for future income, not past (in other words, if you haven’t yet designated anything for housing allowance for 2024, then you can only designate November and December’s income for this year. You can, however, designate a housing allowance for 2025 now).
I hope this helps. If you are unfamiliar with housing allowance (or if your treasurer is), please reach out to the conference so we can help you get this set up.
