Revoking an Exemption from Social Security
Ministers may soon be allowed to revoke an exemption

Ministers may soon be allowed to revoke an exemption [Exemption of Ministers from Social Security Coverage]

Article summary. Many ministers have exempted themselves from self-employment tax by filing a timely application form (Form 4361) with the IRS. Unfortunately, most of these ministers were not eligible for the exemption. In recognition of this fact, and because a growing number of exempt ministers were desperate to rejoin the Social Security program in order to qualify for Medicare benefits, Congress gave ministers a brief "window" of time in 1977, and again in 1987, to revoke an exemption from self-employment tax. Few did so. Ministers soon may be given another window to revoke an exemption from self-employment taxes. It is important for exempt ministers to be aware of these developments so they are ready to respond quickly if another window is provided. The lesson of the 1977 and 1987 legislation is that the longer ministers wait to revoke an exemption, the less likely it is that they will do so. This article reviews the status of current legislative efforts, assesses the likelihood of success, and provides ministers with recommendations to consider.

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Posted: July 1, 1999
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