• A bill (S. 153) introduced in the United States Senate by Senator Strom Thurmond would exempt service performed for church-operated elementary and secondary schools from the federal unemployment tax. The bill would exempt services performed by an employee of “an elementary or secondary school which is operated primarily for religious purposes, which is described in section 501(c)(3)” of the Internal Revenue Code. Currently, federal law exempts from unemployment taxes a school that is “operated, supervised, controlled, or principally supported by a church or a convention or association of churches.” It is unclear whether religious elementary and secondary schools that are not operated or controlled by a church are exempt from federal unemployment taxes. This bill would remove any doubt.
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