I am employed as a Chaplain resident at the VA hospital in San Antonio. Is this considered religious employment? The VA is not considered any particular religion.

[SabrinaD2]

It depends, your employment as a Chaplain resident at the VA hospital in San Antonio may be considered religious employment. Here’s are some key points

• Religious Employment Considerations
  • Nature of Duties: Your role involves providing spiritual care, religious counseling, and conducting religious services, which are inherently tied to religious practices and support
  • Employer's Religious Affiliation: While the VA is not affiliated with any particular religion, it employs chaplains to cater to the diverse spiritual needs of veterans. This means your role as a chaplain is recognized as providing religious services within a government related organization,
  • However, To qualify for tax breaks such as the parsonage exclusion and Social Security Exemption, you generally need to be affiliated with a recognized religious organization. This means you should be ordained, licensed, or commissioned by a church or religious organization
    • Ordination, Licensing, or Commissioning: You must be officially recognized as a minister by a religious organization. This includes performing ministerial services such as conducting worship, administering sacraments, and offering spiritual guidance
    • Housing Allowance Designation: The housing allowance must be officially designated by the employing organization before payment. This is typically documented in meeting minutes or through a formal resolution
    • Use of Housing Allowance: The allowance must be used for housing expenses, such as rent, mortgage payments, utilities, and maintenance. The amount excluded from gross income is the lesser of the amount used for housing, the amount designated as a housing allowance, or the fair rental value of the home
    • W2: f you are eligible, your employer (VA) likely included the clergy housing allowance in Box 14 of your W-2. Click here for steps to enter it into TurboTax
  • Ministers can opt out of the Social Security system by filing Form 4361, Application for Exemption from Self Employment Tax for Use by Ministers, Members of Religious Orders, and Christian Science Practitioners
    • Qualifications: You must be a licensed, commissioned, or ordained minister of a U.S. church that qualifies as tax-exempt under IRC Section 501(c)(3)
    • Basis for Exemption: The exemption must stem from conscientious or theological objections to accepting public insurance benefits, such as those provided under the Social Security Act
    • Filing Deadlines: You must file Form 4361 by the due date of your tax return (including extensions) for the second year after you earned $400 or more in self-employment income from ministerial services