How to Make Sure Clergy Social Security Exemption is Approved

If they choose, clergymen are allowed social security exemption based on religious objections. However, in order for this to happen, they need to correctly fill out IRS Form 4361 in order to be exempt. It’s important that this form be filled out in an accurate and timely manner. Here are some tips on how to correctly fill out the form and reasons why it may be denied.

Unless they fill out a Form 4361 clergymen normally pay out social security taxes just like anybody else who is employed and earns taxable income. The IRS, however, allows church ministers to file an exemption from social security taxes based on religious objections to receiving social security benefits. Form 4361 asks for identification information as well as additional critical data that can make or break a social security exemption plea. Attention needs to be paid to ensuring that the form identifies the applicant as a member of a religious order and that they have a specific conscientious objection to receiving government insurance.  

The applicant must show proof of at least two years of net self-employment income as a clergyman that equals more than $400/year. The document must be submitted with an original signature certifying that their statements are truthful under penalty of perjury.

Issues that have been known to cause denials include not having the initial criteria met. The most basic of these criteria is if the applicant fails to sign the form before sending it or if the applicant won’t commit legally to the statements made on their Form 4361. Also, clergymen may also confuse changing faiths as justification for a social security exemption when this is not the case. The conscientious objection statements must be filled out and included and changes in ordination or religious group are not proper justification for qualifying for a social security exemption. In addition, some denials occur due to insufficient income earned prior to the filing period or if statements made on the form used the wrong language.

Even if the form is approved, any self employment taxes already due prior to the approval still must be paid in full until approval is received in writing. Overpayments can also be refunded after the fact with an amended tax filing. And once the application is granted an exemption, they can’t reverse the exemption at any point in time unless Congress allows for a temporary exception period which has been known to happen in the past but is not currently the situation.

If you’re considering filling out a Form 4361, make sure to discuss with your clergy tax services professional to ensure that you qualify and that the form has been properly filled out.

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Sarah Wozniak

Staff Writer, Page1 Online Marketing