Form 941 for Churches and Ministers: Who Files and What Goes on Each Line
Churches run payroll under rules no other employer has. A minister is an employee for income tax but self-employed for Social Security and Medicare, and the church doesn't have to withhold income tax from the minister's pay at all. Lay staff, such as a secretary, custodian or music director, are ordinary employees.
That split is why answers online disagree on whether a church files Form 941. The answer depends on who you pay and whether anything is withheld. This page sorts it out by staff type and then fills in a real church quarter. For the forms themselves, see Form 941, Schedule B and 941-X in one place.
Form 941 for churches is required whenever the church pays lay staff or withholds income tax from a minister under a voluntary agreement. A church whose only employee is a minister with no voluntary withholding generally has nothing to report on Form 941. Ministers' pay never goes on the Social Security and Medicare lines, because ministers pay self-employment tax instead.
Form 941 for churches: what each type of worker means for the return
| Worker | Line 2 (W-2 box 1 wages) | Line 3 (income tax withheld) | Lines 5a and 5c (Social Security and Medicare) |
|---|---|---|---|
| Minister, no voluntary withholding | Salary, minus a designated housing allowance | Nothing withheld | Never. The minister pays self-employment tax. |
| Minister with a voluntary withholding agreement (Form W-4) | Salary, minus a designated housing allowance | The amount withheld | Never |
| Lay employee (secretary, custodian, musician) | Wages | Required withholding | Yes, like any employee |
| Lay employee at a church that filed the Form 8274 election | Wages | Required withholding | No. The employee pays self-employment tax. |
| Employee with an approved Form 4029 (church also approved) | Wages | Required withholding | No. Check line 4 and write "Form 4029" if no wages on the return are FICA wages. |
Sources: IRS Publication 517 (page updated April 30, 2026); Publication 1828; Instructions for Form 941 (Rev. March 2026), lines 2 to 5.
"Minister" here means a duly ordained, commissioned or licensed minister paid for ministerial services. Pay for work that isn't part of the ministry is treated like any other employee's wages. Whether a given role counts as ministerial is a facts-and-circumstances question for the church and its tax adviser.
Does a church file Form 941 if the pastor is the only employee?
Form 941 is filed by employers who pay wages subject to income tax withholding or to Social Security and Medicare tax. A minister's pay for ministerial work is neither: the church isn't required to withhold income tax from it, and the minister covers Social Security and Medicare through self-employment tax on their own return. So with no voluntary withholding, a pastor-only church generally has nothing to report on Form 941.
Step 3 is where churches get caught. If the church has ever filed a Form 941, the IRS expects one every quarter until it files a final return with line 17 checked. Our guide to zero, seasonal and final Form 941 explains how to stop filing properly instead of simply going quiet.
Worked example: a church quarter with a pastor and two staff
A church pays three people in the third quarter of 2026 and is a monthly depositor:
| Worker | Q3 pay | Designated housing allowance | Income tax withheld |
|---|---|---|---|
| Pastor (voluntary withholding agreement) | $15,000 | $4,500 | $1,800 |
| Church secretary | $9,000 | None | $700 |
| Custodian | $4,500 | None | $250 |
| Form 941 line | Entry | How it's figured |
|---|---|---|
| 1 Employees | 3 | All three were paid for the period including September 12 |
| 2 Wages | $24,000.00 | Pastor $10,500 (after the housing allowance) + $9,000 + $4,500 |
| 3 Income tax withheld | $2,750.00 | $1,800 + $700 + $250 |
| 4 Checkbox | Blank | Some wages (the lay staff's) are subject to Social Security and Medicare |
| 5a Social Security wages | $13,500.00 / $1,674.00 | Lay staff only, times 0.124 |
| 5c Medicare wages | $13,500.00 / $391.50 | Lay staff only, times 0.029 |
| 5e Total | $2,065.50 | $1,674.00 + $391.50 |
| 6, 10 and 12 Total taxes | $4,815.50 | $2,750.00 + $2,065.50 |
| 16 | Second box, three monthly liabilities totaling $4,815.50 | Line 12 is $2,500 or more, so the tax was deposited monthly |
Illustrative 2026 figures. Rates from the March 2026 Instructions for Form 941.
The pastor's $15,000 never touches lines 5a or 5c, and the $4,500 housing allowance doesn't appear on line 2 either. The pastor pays self-employment tax on their own 2026 return, and the housing allowance is generally included in the earnings for that tax even though it's excluded from income tax. If the pastor hadn't signed a withholding agreement, line 3 would be $950 and the pastor's pay would still be in line 2.
You can prepare the church's Form 941 from your payroll totals and create each worker's year-end W-2, then print, sign and file. ePaystubs prepares the forms; it doesn't file them or make deposits for you.
Housing allowance and the minister's W-2
- Box 1: the minister's salary, minus a housing allowance the church officially designated in advance. This is the same amount that goes into Form 941 line 2.
- Boxes 3 to 6: left blank for ministerial pay, since there's no Social Security or Medicare withholding.
- Box 2: any income tax withheld under a voluntary agreement.
- Box 14: the church may report the housing allowance or the fair rental value of a parsonage here.
A minister paid as an independent contractor gets a Form 1099 instead of a W-2, but most ministers are common-law employees of their church. The W-3 totals for the year should match the church's four Forms 941.
Churches that opted out of Social Security and Medicare (Form 8274)
A church or church-controlled organization that is opposed for religious reasons to paying Social Security and Medicare tax can elect, by filing two copies of Form 8274, to exclude its non-minister employees from FICA. After that election:
- The church doesn't withhold or pay Social Security and Medicare on those employees' wages.
- Employees pay self-employment tax on their church wages if they exceed $108.28 for the year.
- The church still withholds federal income tax, so it still files Form 941 with lines 2 and 3 filled in.
- If none of the wages on the return are subject to Social Security or Medicare, the church checks line 4 and skips to line 6.
A separate exemption applies when both the church and an employee belong to a recognized religious sect and have approved Forms 4029. Those wages aren't reported as Social Security or Medicare wages; on Form 941 the church checks line 4 and writes "Form 4029" below the box, and on the W-2 it writes "Form 4029" in box 14 and leaves boxes 3 to 6 blank.
Form 940 and unemployment tax
Churches and religious organizations aren't liable for federal unemployment (FUTA) tax, so a church generally doesn't file Form 940. State unemployment rules are separate and vary by state, so check with your state workforce agency.
Deposits and due dates for church payroll
Churches follow the same deposit rules as any employer. Under the 2026 rules, if line 12 is under $2,500 for the current or prior quarter, the church can pay with the return; otherwise it deposits on a monthly or semiweekly schedule. The full rules are in our guide to the 941 deposit schedule and how to pay.
The Q3 2026 return is due November 2, 2026 and the Q4 return February 1, 2027; see Form 941 due dates for 2026. A very small church whose total employment taxes for the year will be $1,000 or less can ask the IRS for permission to file an annual Form 944 instead.
Church payroll claims to double-check
| What you might read | What IRS guidance says |
|---|---|
| "Every church must file Form 941." | Only churches paying wages subject to withholding or FICA, such as lay staff or a minister with voluntary withholding. |
| "You only file Form 941 if you have more than one employee." | One lay employee is enough. The count isn't the test; the type of wages is. |
| "A pastor-only church files zero returns every quarter." | Not if it has never filed a 941 and doesn't withhold. A church that has filed before must keep filing until a final return. |
| "100% of the pastor's salary goes in W-2 box 1." | A properly designated housing allowance is excluded from box 1 and may be shown in box 14. |
| "Q3 is due October 31 and Q4 January 31." | For 2026 those fall on weekends: November 2, 2026 and February 1, 2027. |
Frequently Asked Questions
A church files Form 941 when it pays wages subject to income tax withholding or Social Security and Medicare tax, which usually means it has lay employees or withholds from a minister under a voluntary agreement. Once it has filed, it keeps filing every quarter until a final return.
No. Ministers pay self-employment tax on their own return for ministerial earnings, so the church doesn't withhold or match Social Security and Medicare. A voluntary agreement can have the church withhold extra income tax to help cover that self-employment tax.
A properly designated housing allowance is excluded from the minister's W-2 box 1, so it isn't part of line 2 on Form 941. It also never appears on lines 5a or 5c. The church may show it in box 14 of the minister's W-2.
No. According to IRS Publication 1828, churches and religious organizations aren't liable for federal unemployment (FUTA) tax, so they generally don't file Form 940 at all. State unemployment coverage is a separate question that depends on your state's own rules.
It lets a church that is religiously opposed to Social Security and Medicare exclude its non-minister employees from FICA. The church still withholds income tax and files Form 941, and in 2026 the employees still pay self-employment tax on church wages over $108.28 a year.
Official Sources and References
- IRS: Publication 517, Social Security and Other Information for Members of the Clergy and Religious Workers
- IRS: Publication 1828, Tax Guide for Churches and Religious Organizations
- IRS: Instructions for Form 941 (Rev. March 2026)
- IRS: Forms 941, 944, 940, W-2 and W-3 for exempt organizations (updated June 28, 2026)