HR227-119

What This Bill Does

The Clergy Act (HR 227) allows ministers, members of religious orders, and Christian Science practitioners to opt back into Social Security coverage after previously choosing to be exempt. Under current law, once clergy elect exemption from Social Security, that decision is permanent. This bill creates a limited two-year window (starting after December 31, 2027) during which those who previously opted out can revoke their exemption and begin paying into Social Security.

Who Benefits and How

Clergy members who regret opting out of Social Security benefit by gaining a second chance to participate in the program. This is particularly valuable for those nearing retirement who may have accumulated insufficient retirement savings and now want access to Social Security benefits, Medicare eligibility tied to Social Security credits, and survivor benefits for their families. The Social Security Administration may also see increased revenue from new self-employment tax contributions.

Who Bears the Burden and How

Clergy who choose to revoke their exemption will begin paying self-employment taxes (currently 15.3% on net self-employment income) that they previously avoided. If they revoke retroactively for a prior tax year, they must immediately pay the full taxes owed for that year. The IRS and Social Security Administration face new administrative responsibilities to develop an application process and create a plan to inform eligible clergy about this option.

Key Provisions

• Creates a time-limited window for clergy to revoke their Social Security exemption, with applications due by the tax return deadline for their second taxable year beginning after December 31, 2027
• Revocations can be effective starting either the first or second taxable year after December 31, 2027, and apply to all subsequent years
• Once revoked, clergy cannot re-elect exemption in the future
• If filing late, clergy must pay all back taxes owed for the applicable year with their application
• Requires the IRS Commissioner (in consultation with the Social Security Commissioner) to submit a plan within 90 days to inform eligible clergy of this new option