Why It Matters
Clergy members who once opted out of Social Security permanently now have a time-limited chance to reverse that decision, according to a new Congressional Research Service (CRS) report. The Clergy Act (P.L. 119-125), signed into law Oct. 20, opens the fourth such revocation window Congress has created since 1977.
The exemption is generally irrevocable, and clergy who obtain it early in their careers may face challenges in preparing for retirement later in life.
The Congressional Budget Office (CBO) estimates the law will generate $84 million in additional payroll tax revenues over 2026-2036, while raising Social Security and Medicare benefit outlays by $1 million each over that period.
The Big Picture
Ministers, members of religious orders who have not taken a vow of poverty, Christian Science practitioners and members of recognized religious sects are automatically covered by Social Security as self-employed workers. They may apply for a Self-Employment Contributions Act (SECA) exemption on grounds of conscience or religious principle, but must file by the due date of the tax return for the second taxable year in which they earn ministerial wages.
Congress created three earlier revocation windows through the Social Security Amendments of 1977, the Tax Reform Act of 1986, and the Ticket to Work and Work Incentives Improvement Act of 1999.
The current window is the longest of the four, running until approximately April 15, 2031, roughly four and a half years after enactment, compared to about 16 months under the 1977 law, about 17 months under the 1986 law and about 28 months under the 1999 law.
Revocation may take effect in either tax year 2029 or 2030 and is irrevocable once effective. Clergy who revoke will pay SECA taxes on ministerial earnings for the remainder of their careers and may qualify for Social Security and Medicare benefits, though they generally must accumulate 40 qualifying credits to receive retired-worker benefits.
Of the $84 million in estimated additional payroll tax revenues, CBO attributes approximately 81% to Social Security taxes and approximately 19% to Medicare taxes.
A separate law, the Social Security Fairness Act of 2023 (P.L. 118-273), repealed the Windfall Elimination Provision and Government Pension Offset for benefits payable after December 2023, removing a reduction that had applied to some clergy who elected coverage from 1984 through 2023.
The Bottom Line
The Clergy Act directs the IRS to develop a plan to notify eligible clergy of the revocation opportunity, which is subject to the IRS's implementation process, and CBO estimates that approximately 3,000 clergy members would reverse their exemptions in 2029 or 2030.
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