Clergy are considered "dual status" because for tax purposes they are considered employees for "regular income
tax" purposes but are considered "self-employed" for social security and medicare purposes. Clergy compensation generally consists of a base salary or wage and a housing allowance. The housing allowance (if properly declared and paid) is not taxable for regular tax purposes but is for self-employment
purposes (unless you exempt out of social security).
Thus, when clergy employers report on a W-2 they show just the salary portion in box 1. Nothing is reported for social security or medicare in boxes 3-8. The housing allowance may show up in box 14.
Your son needs to fill out schedule SE
and report both his salary and housing allowance as compensation for figuring the self-employment taxes. He may reduce this compensation by the amount of any expenses he reasonably incurred in the performance of his duties that will not be reimbursed by his employer.
He can request that his employer withhold Federal income
tax from his regular paychecks. The trick is to request enough withholding to cover both the income tax liability
and the self-employment tax liability.
If his church is switching him over from employee status to this "dual status" I would recommend he speak with his supervisor or the board (whoever sets his compensation) about increasing his salary by at least the amount the church is going to save from not having to pay in its share of the FICA/Medicare matching contribution. If you are able to get them to agree to this then his take-home pay will not change much if at all. Its just the manner in how its being reported that’s changing.