Sponsors (4)
The bill gives some clergy a clear path to join Social Security and obtain retirement and survivor benefits, while creating risks of large retroactive tax bills, permanently removing exemption flexibility, and modestly increasing administrative and program costs.
Ordained ministers, members of religious orders, and religious practitioners who revoke a prior Social Security exemption will become covered by Social Security, gaining eligibility for future monthly retirement benefits and lump-sum survivors' payments.
Creates a clearer administrative process, deadline for revocation, and a congressional reporting requirement, reducing uncertainty for clergy considering opting into Social Security and increasing the likelihood of timely outreach or fixes.
Requires outreach/notification so religious workers learn they can revoke prior exemption elections, helping affected workers make more informed retirement and tax decisions.
Clergy who revoke late may face large unexpected retroactive self-employment tax bills, imposing significant financial burdens on individuals who did not anticipate or budget for those taxes.
Those who revoke the exemption are permanently barred from reapplying for the exemption later, removing future flexibility and potentially harming individuals who later prefer exemption status.
Expanding Social Security coverage for some previously exempt clergy modestly increases future program costs, which could put upward pressure on program financing and indirectly affect taxpayers.
Based on analysis of 3 sections of legislative text.
Allows certain clergy who claim the §1402(e)(1) exemption to revoke it by filing with the IRS by a 2028 deadline, makes revocation effective for taxable years after 2027, and requires IRS outreach.
Introduced February 19, 2025 by Katie Boyd Britt · Last progress February 19, 2025
Allows ordained/commissioned/licensed ministers, members of religious orders, and Christian Science practitioners who currently claim the §1402(e)(1) self-employment tax exemption to revoke that exemption by filing an application with the IRS by a specified deadline in 2028. The revocation becomes effective for a taxable year beginning after December 31, 2027 (as chosen on the application), applies to future Social Security credits and benefits for that year and later years, is irrevocable, and includes rules for late-filed applications and payment of self-employment taxes. The IRS must also work with the Social Security Administration to produce and submit an outreach plan within 90 days explaining the revocation option to affected clergy.