158.1 Self-Employed Faculty

Created by: Stephanie Ferguson on 02/24/2005
Category: 1 - Academic Affairs; 50 - Faculty Status
 
Originator: Faculty Status Committee
Current File: 158.1
Adoption Date: 02/24/2005
Reviewed for Currency: 04/21/2014
 
Replaces File: 158.1
Date of Origin: 11/12/1975
 
Classification: Faculty
 
In Archive? 0


158.1 Self-Employed Faculty

 

A. Background

In 1971, the Internal Revenue Service (IRS) interpreted Revenue Ruling 55-243 as revised by Ruling 71-7 to apply to all ordained faculty members who were employed by a religious institution regardless of their denomination or institutional function. Accordingly, these faculty members were declared "self-employed" for income withholding and Social Security tax purposes. In 1992, the South Carolina Baptist Convention severed ties with Furman University, and the University became a private rather than a religious institution. As a result, the IRS ruling applies only to the Chaplain and Associate Chaplain, who are performing ministerial duties for Furman University. All other ordained ministers are treated as "regular employees" for income withholding and Social Security tax purposes.

 

B. Policy

Furman University will abide by the interpretation of the Revenue Ruling 71-7 until such time as that interpretation is changed.

 

C. Guidelines

1. Under the ruling, the University Chaplain and Associate Chaplain are considered "self-employed" and are required to pay all of their Social Security tax following the self-employed rates prescribed by IRS. The University does not share this expenditure.

2. The University has agreed to withhold from the salary an amount designated by the "self-employed" person to cover his or her necessary withholding and Social Security payments, thus avoiding for him or her the necessity of filing quarterly estimates and tax payments.

3. The "self-employed" person may claim a portion of his or her salary as housing allowance by filing a request with the Human Resources Office. The request will be reviewed by the President for approval.

4. The University recognizes that this arrangement relates only to the technicality of an IRS ruling and affirms that such "self-employed" ordained faculty have the same internal status and privileges as all other members of the faculty.

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