Clergy Act
Officially: “Clergy Act” Read the full text
What it does
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1Short title
This section would give the Act its official short title, the Clergy Act.
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1. Short title This Act may be cited as the Clergy Act .
2Revocation by members of the clergy of exemption from social security coverage
This section would let a duly ordained, commissioned, or licensed minister of a church, a member of a religious order, or a Christian Science practitioner give up an exemption from Social Security self-employment tax that the person had already received under section 1402(e)(1) of the tax code, if that exemption is in effect for the tax year this Act becomes law. To give up the exemption, the person would file an application in the form and manner, and with the official, that the Commissioner of Internal Revenue sets. The application would have to be filed no later than the due date, including any extension, of the person's federal income tax return for the person's second tax year that begins after December 31, 2027. In the application the person would choose whether the revocation takes effect starting with the person's first tax year that begins after December 31, 2027, or the person's second tax year that begins after that date, and once chosen it would apply to that year and every year after. After revoking, the person could never again file an application for an exemption under section 1402(e)(1). If a person files the application after the due date of that person's tax return for a given year, but wants the revocation to apply to that same year, the application would have to include full payment of the self-employment tax that would have been owed on that year's earnings had the exemption not applied, with that amount figured by counting income that two specific exclusions in section 1402(c) would otherwise leave out of self-employment earnings. This section would apply to work performed in tax years beginning after December 31, 2027, and to the monthly Social Security benefits paid based on that person's wages and self-employment income for months in or after the calendar year the revocation takes effect, and to lump-sum death payments for deaths occurring in or after that year.
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2. Revocation by members of the clergy of exemption from social security coverage (a) In general Notwithstanding section 1402(e)(4) of the Internal Revenue Code of 1986, any exemption which has been received under section 1402(e)(1) of such Code by a duly ordained, commissioned, or licensed minister of a church, a member of a religious order, or a Christian Science practitioner, and which is effective for the taxable year in which this Act is enacted, may be revoked by filing an application therefor (in such form and manner, and with such official, as may be prescribed by the Commissioner of Internal Revenue), if such application is filed no later than the due date of the Federal income tax return (including any extension thereof) for the applicant’s second taxable year beginning after December 31, 2027. Any such revocation shall be effective (for purposes of chapter 2 of the Internal Revenue Code of 1986 and title II of the Social Security Act ( 42 U.S.C. 401 et seq. )), as specified in the application, either with respect to the applicant’s first taxable year beginning after December 31, 2027, or with respect to the applicant’s second taxable year beginning after such date, and for all succeeding taxable years; and the applicant for any such revocation may not thereafter again file an application for an exemption under such section 1402(e)(1). If the application is filed after the due date of the applicant’s Federal income tax return for a taxable year and is effective with respect to that taxable year, it shall include or be accompanied by payment in full of an amount equal to the total of the taxes that would have been imposed by section 1401 of the Internal Revenue Code of 1986 with respect to all of the applicant’s income derived in that taxable year which would have constituted net earnings from self-employment for purposes of chapter 2 of such Code (notwithstanding paragraphs (4) and (5) of section 1402(c)) except for the exemption under section 1402(e)(1) of such Code. (b) Effective date Subsection (a) shall apply with respect to service performed (to the extent specified in such subsection) in taxable years beginning after December 31, 2027, and with respect to monthly insurance benefits payable under title II of the Social Security Act on the basis of the wages and self-employment income of any individual for months in or after the calendar year in which such individual’s application for revocation (as described in such subsection) is effective (and lump-sum death payments payable under such title on the basis of such wages and self-employment income in the case of deaths occurring in or after such calendar year).
3Report to Congress
This section would require the Commissioner of Internal Revenue, working with the Commissioner of Social Security, to develop a plan and submit it to the House Committee on Ways and Means and the Senate Committee on Finance no later than 90 days after this Act becomes law. The plan would cover how to inform duly ordained, commissioned, or licensed ministers of a church, members of a religious order, and Christian Science practitioners that they are eligible to revoke a prior election to be exempt from Social Security participation.
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3. Report to congress Not later than 90 days after the date of enactment of this Act, the Commissioner of Internal Revenue, in consultation with the Commissioner of Social Security, shall develop and submit to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate a plan to inform duly ordained, commissioned, or licensed ministers of a church, members of a religious order, and Christian Science practitioners of their eligibility to revoke any prior election of exemption from Social Security participation.
Where it is
In the House.