Clergy Act
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The bill would give clergy members, members of religious orders, and Christian Science practitioners a limited window to revoke a prior exemption from Social Security and Medicare taxes on their ministerial earnings.
It would let those who previously opted out for religious reasons opt back in to gain Social Security and Medicare coverage, and would require the IRS to notify eligible individuals of this one-time chance.
What this bill would do
What it would do
The bill would allow ministers, members of religious orders, and Christian Science practitioners who hold an exemption from Social Security self-employment taxes to revoke that exemption by filing an application no later than the due date of their federal income tax return for their second taxable year beginning after December 31, 2028. The revocation would take effect for either the first or second taxable year beginning after that date, as chosen in the application, and would be permanent going forward. If the application is filed late relative to a taxable year it applies to, the applicant must pay the self-employment taxes owed for that year. The bill would also require the IRS, working with the Social Security Administration, to submit a plan to Congress within 90 days of enactment for informing eligible clergy of this revocation opportunity. It does not change the exemption process itself for people who have not yet claimed it.
Key provisions
- 1Would let clergy, religious order members, and Christian Science practitioners revoke a prior Social Security tax exemption by a specified deadline
- 2Would make the revocation effective for either the first or second taxable year after December 31, 2028, and permanent thereafter
- 3Would require payment of back self-employment taxes if a late-filed revocation applies to a past taxable year
- 4Would require the IRS, in consultation with the Social Security Administration, to report to Congress a plan for informing clergy of their revocation eligibility
Who would be affected
Duly ordained, commissioned, or licensed ministers, members of religious orders, and Christian Science practitioners who previously claimed a religious exemption from Social Security and Medicare self-employment taxes, as well as the Internal Revenue Service and Social Security Administration, which would coordinate outreach and process revocations.
Why it matters
Clergy who took the exemption years ago may now want Social Security and Medicare retirement benefits but currently cannot re-enter the system. This bill would give them a defined, one-time opportunity to do so, at the cost of paying self-employment taxes going forward and, in some cases, back taxes for the year the revocation applies to.
What would change
Changes to existing law
Amends Internal Revenue Code of 1986, Section 1402(e) (Sec. 2(a))
Creates a temporary window allowing a normally irrevocable religious exemption from self-employment Social Security tax to be revoked
Amends Social Security Act, Title II (42 U.S.C. 401 et seq.) (Sec. 2(b))
Ties revoked exemptions to eligibility for monthly insurance benefits based on the individual's wages and self-employment income
Agencies directed to act
Effective dates
- Deadline to file a revocation application
- Revocation of exemption takes effect
- IRS report to Congress on outreach plan
Funding and costs
Congressional Budget Office estimate
CBO estimates the Clergy Act would reduce the federal deficit by $82 million over the 2026–2036 period, primarily from increased self-employment tax revenues collected from clergy who opt back into Social Security and Medicare coverage.
H.R. 227 would allow clergy members — who previously made a one-time, irrevocable choice to exempt their ministerial earnings from self-employment taxes — to reverse that decision during calendar years 2029 or 2030. CBO and the Joint Committee on Taxation estimate roughly 3,000 clergy would take up this option, generating $84 million in additional payroll tax revenues (the main source of federal income) over the 2026–2036 window, while increasing direct spending (mandatory benefit outlays) for Social Security and Medicare by only $2 million over the same period, for a net deficit reduction of $82 million. Most of the additional Social Security and Medicare benefit payments triggered by the bill would come after 2036, but CBO projects net direct spending would not exceed $2.5 billion in any subsequent 10-year period. Both intergovernmental and private-sector mandates are excluded from review under the Unfunded Mandates Reform Act because the bill relates to the Social Security (OASDI) program.
How implementation would work
Eligible individuals would file a revocation application with the IRS in a form and manner the Commissioner prescribes, specifying whether it applies to their first or second taxable year beginning after December 31, 2028. Revocations effective for a taxable year after that year's tax deadline has passed must include payment of the corresponding self-employment taxes. Within 90 days of enactment, the IRS Commissioner, consulting with the Social Security Commissioner, must submit an outreach plan to the House Ways and Means Committee and Senate Finance Committee to inform eligible clergy of their revocation rights.
Legislative status & sources
Latest action
Received in the Senate and Read twice and referred to the Committee on Finance.
Official CRS summary
Show the CRS summaryHide the CRS summary
This bill establishes a two-year window for certain members of the clergy and Christian Science practitioners to revoke their exemption from Social Security and Medicare taxes on ministerial earnings. Under current law, such individuals who object to participation in public insurance programs on religious or conscientious grounds may apply to the Internal Revenue Service (IRS) for an irrevocable exemption and will not receive Social Security or Medicare benefits in retirement unless they have qualifying credits from other employment.
The IRS must develop a plan to inform members of the clergy and Christian Science practitioners of their eligibility to revoke prior exemptions, pursuant to the bill's changes.
Legislative subjects
Congressional oversight; Income tax exclusion; Religion; Social Welfare; Social security and elderly assistance; Tax administration and collection, taxpayers
Committee report
H. Rept. 119-425