The U.S. Senate unanimously passed the Clergy Act on September 30, following House passage earlier this year. Itnow goes to President Trump for his signature.
If signed into law, the Clergy Act will create a temporary, two-year window for eligible clergy to re-enter Social Security during tax years 2029 and 2030.
Why the Clergy Act matters
Under current law, qualifying ministers may opt out of Social Security coverage for their ministerial earnings based on religious opposition to accepting certain public insurance benefits.
But that decision is generally irrevocable. A minister who later changes his or her mind cannot simply elect to participate again.
The Clergy Act would provide a temporary exception.
Clergy who use the new opt-in window will begin paying Social Security taxes on their ministerial earnings. Consistent with current eligibility requirements, they generally will need to earn 40 Social Security credits—typically requiring about 10 years of covered work—to qualify for Social Security retirement benefits.
Congress has provided similar opportunities for clergy to re-enter Social Security in the past, including in 1977, 1986, and 1999.
Advantage Members: Go deeper on Social Security for ministers in Chapter 10 of the online Church & Clergy Tax Guide.
What happens next?
The law also directs the IRS, in consultation with the Social Security Administration, to develop a plan for informing eligible clergy about the opportunity to opt back in.
Within 90 days after enactment, the IRS must submit that plan to the House Ways and Means Committee and Senate Finance Committee. The IRS also will develop the forms clergy will use to revoke their previous exemptions.
The Clergy Act resulted from several years of work by the Church Alliance, which advocates on benefits issues for 35 denominational benefit organizations representing a broad range of Judeo-Christian faith traditions.
The bipartisan legislation was led by Reps. Vince Fong (R-Calif.) and Mike Thompson (D-Calif.) in the House and Sens. Katie Britt (R-Ala.) and Maggie Hassan (D-N.H.) in the Senate.
For ministers who previously opted out of Social Security, the key dates to remember are 2029 and 2030.
What This Means for Ministers
The IRS and Social Security Administration are expected to provide additional guidance explaining how eligible ministers can opt back into Social Security under the Clergy Act.
Meanwhile, ministers should understand several key points addressed below.
When can ministers opt back into Social Security?
Eligible ministers will need to make the election during the 2029 or 2030 tax years.
The deadline is expected to run through the due date for the 2030 federal income tax return, including extensions.
Additional IRS and Social Security guidance should clarify:
- What form ministers must file.
- Whether the opt-in election requires formal approval.
- Whether simply filing the required opt-in election will establish participation.
How many Social Security credits will ministers need?
Ministers generally will need 40 Social Security credits, often described as 40 quarters of covered work, to qualify for Social Security retirement benefits.
That is typically the equivalent of about 10 years of covered employment.
Importantly, prior non-ministerial work may count toward those 40 credits.
Examples may include:
- Jobs held during high school or college.
- Non-ministerial employment (such as jobs held while attending seminary or working bivocationally in ministry).
- Other jobs for which FICA taxes were paid.
A minister who already has Social Security credits from earlier employment may therefore need fewer additional years of covered work after opting back in.
When can retirement benefits begin?
Qualifying for Social Security retirement benefits and reaching retirement age are separate requirements.
Generally:
- Reduced retirement benefits may begin as early as age 62.
- Full retirement benefits generally begin at a minister’s full retirement age, currently between ages 66 and 67 depending on birth year.
- Delaying benefits beyond full retirement age can increase monthly benefits, up to age 70.
How do Social Security disability benefits differ?
Social Security Disability Insurance, or SSDI, uses different credit requirements.
Eligibility depends partly on age and how recently the credits were earned.
In general:
- Age 31 or older: Usually 40 credits are required, with 20 earned during the 10 years before disability begins.
- Age 24 to 31: The minister generally needs credits covering about half the time between age 21 and the onset of disability.
- Under age 24: Generally 6 credits earned during the three years before disability begins are required.
Because SSDI rules are more complex, ministers considering the Clergy Act opt-in should review their individual Social Security earnings record.
How will Social Security retirement benefits be calculated?
Social Security retirement benefits are based on a worker’s lifetime covered earnings.
The Social Security Administration generally:
- Adjusts prior earnings to account for changes in average wages.
- Uses the worker’s 35 highest years of indexed earnings.
- Applies a formula to determine the monthly retirement benefit.
For ministers, an important point is that qualifying clergy housing allowance generally remains included in net earnings from self-employment for Social Security purposes, even though it is excluded from federal income tax.
What should ministers do now?
Ministers who previously opted out of Social Security should begin gathering information about their existing Social Security credits and earnings history.
They should also watch for forthcoming guidance from the IRS and Social Security Administration explaining exactly how the opt-in window will work for the 2029 and 2030 tax years.
Church Law & Tax will continue monitoring the Clergy Act, including the President’s action on the bill and forthcoming IRS guidance about how eligible clergy can opt back into Social Security.