Congressman Kevin McCarthy recently held a press conference with local pastors about his newly introduced bill, the Clergy Act. This bill would offer ministers – many of whom opted out of paying into Social Security in their youth – a two-year “open season” to effectively opt-in to Social Security. McCarthy released the following statement:
“In speaking with pastors throughout our community and faith leaders across the country, it became clear to me that clergy members need more choice and adaptability when it comes to planning for their retirement, including the ability to opt back into Social Security.”
The Clergy Act would allow ministers who have previously opted out of self-employment social security to opt back in. Dan Busby, ECFA’s president, said “This opt-in provision is long past due and on behalf of ECFA’s over 2,400 members, we salute Representative McCarthy for introducing this legislation.”
An application must be filed by a minister no later than the due date of the Federal income tax return (including any extension thereof) for the minister’s second taxable year beginning after December 31, 2020. This proposed legislation does not require the payment of retroactive social security taxes for years before the opt-in is effective.
Clergy Financial Resources serves as a resource for clients to help analyze the complexity of clergy tax law, church payroll & HR issues. Our professionals are committed to helping clients stay informed about tax news, developments and trends in various specialty areas.
This article is intended to provide readers with guidance in tax matters. The article does not constitute, and should not be treated as professional advice regarding the use of any particular tax technique. Every effort has been made to assure the accuracy of the information. Clergy Financial Resources and the author do not assume responsibility for any individual’s reliance upon the information provided in the article. Readers should independently verify all information before applying it to a particular fact situation, and should independently determine the impact of any particular tax planning technique. If you are seeking legal advice, you are encouraged to consult an attorney.
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