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The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
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Retirement benefits you received from a church plan after
retirement, or
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The rental value of a home or an allowance for a home
furnished to you (including payments for utilities) after retire-
ment.
If you were a duly ordained minister who was an employee
of a church and you must pay SE tax, the unreimbursed busi-
ness expenses that you incurred as a church employee are not
deductible as an itemized deduction for income tax purposes.
However, when figuring SE tax, subtract on line 2 the allowa-
ble expenses from your self-employment earnings and attach
an explanation.
If you were a U.S. citizen or resident alien serving outside
the United States as a minister or member of a religious order
and you must pay SE tax, you can’t reduce your net earnings
by the foreign earned income exclusion or the foreign housing
exclusion or deduction.
See Pub. 517 for additional details regarding social security
for members of the clergy and religious workers.
Members of Certain Religious Sects
If you have conscientious objections to social security insur-
ance because of your membership in and belief in the teachings
of a religious sect recognized as being in existence at all times
since December 31, 1950, and which has provided a reasonable
level of living for its dependent members, you are exempt from
SE tax if you received IRS approval by filing Form 4029. In
this case, don’t file Schedule SE. Instead, enter “Ex-
empt—Form 4029” on Schedule 2 (Form 1040), line 4. See
Pub. 517 for details.
U.S. Citizens Employed by Foreign Governments or
International Organizations
You must pay SE tax on income you earned as a U.S. citizen
employed by a foreign government (or, in certain cases, by a
wholly owned instrumentality of a foreign government or an
international organization under the International Organizations
Immunities Act) for services performed in the United States,
Puerto Rico, Guam, American Samoa, the Commonwealth of
the Northern Mariana Islands, or the U.S. Virgin Islands. Re-
port income from this employment on Schedule SE, line 2. If
you performed services elsewhere as an employee of a foreign
government or an international organization, those earnings are
exempt from SE tax.
Exception—Dual citizens. A person with dual U.S.-foreign
citizenship is generally considered to be a U.S. citizen for so-
cial security purposes. However, if you are a U.S. citizen and
also a citizen of a country with which the United States has a
bilateral social security agreement, other than Canada or Italy,
your work for the government of that foreign country is always
exempt from U.S. social security taxes. For further information
about these agreements, see the exception shown in the next
section.
U.S. Citizens or Resident Aliens Living Outside the
United States
If you are a self-employed U.S. citizen or resident alien living
outside the United States, in most cases you must pay SE tax.
Foreign earnings from self-employment can’t be reduced by
your foreign earned income exclusion when computing SE tax.
Exception. The United States has social security agreements
with many countries to eliminate dual taxes under two social
security systems. Under these agreements, you must generally
pay social security and Medicare taxes to only the country in
which you live.
The United States now has social security agreements with
the following countries: Australia, Austria, Belgium, Brazil,
Canada, Chile, the Czech Republic, Denmark, Finland, France,
Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Lux-
embourg, the Netherlands, Norway, Poland, Portugal, the Slo-
vak Republic, Slovenia, South Korea, Spain, Sweden, Switzer-
land, the United Kingdom, and Uruguay.
If you have questions about international social security
agreements, or to see if any additional agreements have been
entered into, you can go to the SSA's International Programs
website at SSA.gov/international. The website also provides
contact information for questions about benefits and the agree-
ments.
If your self-employment income is exempt from SE tax, you
should get a statement from the appropriate agency of the for-
eign country verifying that your self-employment income is
subject to social security coverage in that country. If the for-
eign country won’t issue the statement, go to the SSA Office of
Earnings and International Operations at SSA International
Programs Online Certificate of Coverage Service. Don’t com-
plete Schedule SE. Instead, attach a copy of the statement to
Form 1040, 1040-SR, or 1040-NR, and enter “Exempt, see at-
tached statement” on Schedule 2 (Form 1040), line 4.
Nonresident Alien
If you are a self-employed nonresident alien living in the Uni-
ted States, you must pay SE tax if an international social secur-
ity agreement in effect determines that you are covered under
the U.S. social security system. See Exception under U.S. Citi-
zens or Resident Aliens Living Outside the United States, earli-
er, for information about international social security agree-
ments. If your self-employment income is subject to SE tax,
complete Schedule SE and file it with your Form 1040-NR.
Chapter 11 Bankruptcy Cases
While you are a debtor in a chapter 11 bankruptcy case, your
net profit or loss from self-employment (for example, from
Schedule C or Schedule F) won't be included in your Form
1040 or 1040-SR income. Instead, it will be included on the in-
come tax return (Form 1041) of the bankruptcy estate. Howev-
er, you (not the bankruptcy estate) are responsible for paying
SE tax on your net earnings from self-employment.
Enter on the dotted line to the left of Schedule SE, line 3,
“Chap. 11 bankruptcy income” and the amount of your net
profit or (loss). Combine that amount with the total of lines 1a,
1b, and 2 (if any) and enter the result on line 3.
SE-2