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Church ministers' “alofas” will be taxed says ASG

The Department of Treasury will be taxing the church minister’s salaries or “alofas,” said ASG Tax Office Manager, Richard Jimmerson in an interview with Samoa News over the weekend. He told Samoa News that church ministers are considered “self employed” and they need to pay their dues and taxes to the American Samoa Government.


Responding to Samoa News queries, Jimmerson stated that “the envelopes ministers get for performing services (prayers/sermons) are taxable.” He pointed out that “many don't file taxes or pay self employment tax, which means they don't support LBJ or put away Social Security money for retirement, and rely on large monetary gifts when they retire.”


 According to Jimmerson, under Internal Revenue Service, Topic 417 — Earnings for Clergy, it says that “a licensed, commissioned or ordained minister is generally the common law employee of the church, denomination, sect or organization that employs him or her to provide ministerial services.”


He stated that there are some exceptions such as traveling evangelists who are independent contractors (self-employed) under the common law.


“If you are a minister performing ministerial services, all of your earnings, including wages, offerings and fees you receive for performing marriages, baptisms, funerals, etc., are subject to income tax, whether you earn the amount as an employee or self-employed person,” he stated. However, how you treat expenses related to those earnings differs if you earn the income as an employee or as a self-employed person, the Tax Office Manager noted.


Jimmerson said that for Social Security and Medicare tax purposes, regardless of your status under the common law, the services you perform in the exercise of your ministry are considered self-employment earnings and are generally subject to self-employment tax.


According to IRS publication 517, Social Security and other Information for Members of the Clergy and Religious Workers, there are limited exceptions from self-employment tax.


Samoa News reached out to the Treasurer, Ueligatone Tonumaipe’a, who confirmed that this is something the tax office has been working on for sometime.


Samoa News understands church ministers collect between $1,000- $10,000 a month from their “alofas” or money given to them by their church members, depending on the size of the congregation. The alofas also include money faifeaus receive for overseeing special events like consecrations, opening ceremonies, funerals, weddings, birthdays, etc., where an ‘envelope’ is usually given to ‘reward or honor’ their presence.


Separate from the alofas are the collections churches receive from the congregation for church expenses, such as utilities, building maintenance, and other church programs, such as Sunday school, etc.