Deferred SE Tax - Clergy with voluntary withholding

[mericson2]

Clergy person paying SE tax on salary and housing allowance. Has voluntary withholding instead of making estimated tax payments.

Clergy person deferred 50% of 2020 SE tax.

TheTaxBook news of 7/21/21 correctly gives first 1/2 of deferral due 12/31/2021 with remainder due 12/31/2022. Notes due dates are EOY, not filing deadline. Says SE persons must make estimated tax payments noting "deferred Social Security Tax."

Will voluntary withholding, if sufficient to pay required portion of 2020 deferred taxes by 12/31/2021, suffice or must this actually be handled through estimated tax payments?

So far see no reconciling lines in draft Schedules SE, 2, or 3, or Form 1040.

[TAXNJ]

See TTB 5-3 chart and page 14-6. If not applicable repost

Pay SE tax on salaries and other income for services performed as an ordained, commissioned, or licensed minister, member of a religious order, or a Christian Science practitioner. Housing allowance income may be subject to SE tax. See Parsonage (Housing) Allowance, page 14-6 . Exceptions:

• A minister or Christian Science practitioner can apply for exemption from SE tax by filing Form 4361 , Application for Exemption From Self-Employment Tax for Use by Ministers, Members of Religious Orders and Christian Science Practitioners.

• A member of a recognized religious group can file for an exemption from SE tax if he or she is conscientiously opposed to accepting Social Security or Medicare benefits, by filing Form 4029 , Application for Exemption From Social Security and Medicare Taxes and Waiver of Benefits.

• Payment for services performed by a member of a religious order who has taken a vow of poverty is exempt from SE tax. [IRC ?1402(c)

[mericson2]

Agree with posting by TAXNJ on impact of SE tax on Clergy.

Question here is whether increased voluntary withholding sufficient to handle payment of 50% of deferred SE tax by 12/31/2021 and how this is reconciled on 2021 (and 2022) filed forms.

[TAXNJ]

any info in the link below help?

https://www.irs.gov/newsroom/how-self-employed-individuals-and-household-employers-repay-deferred-social-security-tax

[mericson2]

Thanks. Seems IRS did not envision situation where Clergy subject to SE tax could make payments through voluntary withholding. Pertinent information from IRS link above seems to be:

• Should be separate payments from other tax payments to ensure they are applied to the deferred tax balance on the tax year 2020 Form 1040 since IRS systems won't recognize the payment for deferred tax if it is with other tax payments or paid with the current Form 1040.

So seems safest to counsel client to use EFTPS or some other direct pay method and designate as instructed. Will have to alter voluntary withholding to compensate.