Sponsors (3)
The bill creates a formal process letting some religious objectors reclaim employee FICA withholding—raising take‑home pay and due‑process clarity for those individuals—while reducing Social Security/Medicare receipts and imposing new administrative and employer compliance costs.
Members of certain religious faiths can reclaim employee FICA tax withheld for years when they have an approved authorization, increasing their take-home pay.
Religious claimants gain a clear administrative pathway (application and authorization) to request an exemption and refund, providing due process and predictable government procedures.
Social Security and Medicare trust fund receipts would be reduced by refunded employee FICA taxes, potentially increasing long‑term funding pressure on retirement and health programs.
The IRS will incur additional administrative costs to process exemption applications and refunds, creating new federal workload and potential processing delays for taxpayers.
Employers and payroll providers must verify authorizations and adjust withholding/filing, increasing compliance complexity and costs—especially for small businesses.
Based on analysis of 2 sections of legislative text.
Creates a refund/credit pathway for employee FICA (Social Security and Medicare) taxes withheld for employees who obtain a specified religious authorization.
Creates a new tax-code rule letting certain people with recognized religious objections get refunds or credits of employee Social Security and Medicare (FICA) taxes that were withheld, if they obtain an authorization like the one described in current law for self-employed religious exemptions. It sets up an application/authorization process modeled on existing religious-exemption rules and applies to taxable years beginning after enactment. The change affects employees who meet the narrow religious criteria already used for self-employment tax exemptions and gives them a path to recover FICA amounts withheld while an authorization is in effect. It does not change benefit eligibility rules or create new federal spending programs.
Official title: To amend the Internal Revenue Code of 1986 to provide for a credit against tax, or refund of tax, for certain Federal insurance taxes for employees who are members of religious faiths which oppose participation in such insurance.
Introduced July 15, 2025 by Troy Balderson · Last progress July 15, 2025