Is It Okay for a Minister to Opt Out of Social Security?
Specifically the first link above
it is interesting. my dad opted out, and it is truly his conscience—he doesn’t want to expect the govt to care for him. I’m not sure of the whole background of how he came to this value, but i think it had to do with his childhood and his dad leaving when he was a really little and his mom just worked hard and refused govt dependency.
I appreciated the article and would encourage any still wondering to read the IRS form for him/herself (link above) that requires ministers to indicate that they are opting out of SS because they object to public insurance, etc., based on religious principle. My husband doesn’t think SS will be around to pay for him, either, but he wasn’t objecting to SS on “religious principle.” An older minister told him after his ordination that he would have to opt out, in order to afford to live on his salary, and I know other young ministers are receiving this and similar counsel. But Dr. Moore did a stellar job of outlining the real issues from a theological, rather than pragmatic, perspective.
And, yes, churches that are seeking to serve their ministers do not have to label them as “self-employed” but can pay them as regular employees, splitting the SS & Medicare costs as other employers do. It’s up to each church & minister to seek the best solution.
And, yes, churches that are seeking to serve their ministers do not have to label them as “self-employed” but can pay them as regular employees, splitting the SS & Medicare costs as other employers do. It’s up to each church & minister to seek the best solution.
I found the 4361 annoying in the extreme. There is no way for me to answer it one way or the other because I do not except the premise that apparently informs the question. OK, it’s not worded as a question, but the gist is “Do you believe, for religious reasons, that it’s wrong for the government to pay public insurance?” The problem I have with it is that I do not believe it is wrong for the government to pay it once they have taken it, but I do believe it is wrong for them to take it in the first place w/o my consent. The ‘religious reasons’ part is tricky, but it annoys me that they try to separate paying it from acquiring it.
So the underlying premise is that you have to be against paying it of you’re against collecting it, but that isn’t a valid assumption.
So the underlying premise is that you have to be against paying it of you’re against collecting it, but that isn’t a valid assumption.
Views expressed are always my own and not my employer's, my church's, my family's, my neighbors', or my pets'. The house plants have authorized me to speak for them, however, and they always agree with me.
[MClark] And, yes, churches that are seeking to serve their ministers do not have to label them as “self-employed” but can pay them as regular employees, splitting the SS & Medicare costs as other employers do. It’s up to each church & minister to seek the best solution.Perhaps you should draw a distinction between income taxes and Social Security. http://www.irs.gov/pub/irs-pdf/p517.pdf] IRS Publication 517 indicates that for Social Security purposes, ministers are always self-employed (see page three under the heading “Minister”). See also http://store.churchlawtodaystore.com/20chcltaxgu4.html The Church and Clergy Tax Guide for more information—the 2008 edition has a section that begins on page 73. It states: “While most ministers are employees for federal income tax reporting purposes, they all are self-employed for Social Security purposes (with respect to services they perform in the exercise of their ministry). This means ministers are not subject to Social Security and Medicare taxes, even though they report their income taxes as employees and receive a W-2 from their church. Rather, they pay the self-employment tax” (emphasis added).
Calling someone who does the work of a minister something besides a minister is tenuous and risky for both the church and the minister. As always, it is wise to consult an accountant who is well versed with clergy in making these decisions on “status.”
Father of three, husband of one, servant of the Lord Jesus Christ. I blog at mattolmstead.com.
Matthew is right (post 5) — Don’t try dealing with this unless you have an accountant on your side who knows the tax law for clergy (i.e., not someone who sets up shop in February and leaves in April and never did a tax return for a pastor before).
You need to consult an expert on this or you will get yourself in big-time trouble.
I can truly say that “because of my religious principles I am opposed to” this Ponzi scheme — I mean, Social Insecurity.
You need to consult an expert on this or you will get yourself in big-time trouble.
I can truly say that “because of my religious principles I am opposed to” this Ponzi scheme — I mean, Social Insecurity.
Church Ministries Representative, serving in the Midwest, for The Friends of Israel Gospel Ministry
“Do you believe, for religious reasons, that it’s wrong for the government to pay public insurance?”That’s not the objection. Here it is:
I certify that I am conscientiously opposed to, or because of my religious principles I am opposed to, the acceptance (for services I perform as a minister, member of a religious order not under a vow of poverty, or a Christian Science practitioner) of any public insurance that makes payments in the event of death, disability, old age, or retirement; or that makes payments toward the cost of, or provides services for, medical care. (Public insurance includes insurance systems established by the Social Security Act.)Notice that the objection is
1) a conscientious objection (not a matter of economics, whether on the front end, i.e., can’t afford to pay it; or the back end, i.e., it is a bad investment);
2) it is based on receiving public insurance (essentially life or health), not paying into it;
3) and it is for the services performed as minister (not for secular employment).
Some people think that if you object, then you must object in secular income as well, which is to say that if a minister opts out, he cannot legitimately accept SS income from his secular employment. Yet that is not true.
One of the frequent objections is what Paul mentions, essentially the bad investment. Technically, it’s not an investment. Your money is not being saved for you, but rather you are paying someone else. It is Ponzi scheme that is likely not sustainable. But that is not the objection. Again, the objection is not based on the idea that it is a bad investment or a poor use of money. The objection is to receiving insurance paid by the government based on money you earned as a church minister.
That is a very narrow objection.
So I am interested, for those who opted out, on what basis do you object to receiving money, based on your income as a pastor, from public insurance in the event of sickness or death?
2) it is based on receiving public insurance (essentially life or health), not paying into it;That was my point. Item two tries to separate receiving public insurance in isolation from the collection of it and that’s really a stretch. There can’t be anything there to receive unless it is collected first. So they really ought to include both with an and/or or something. The language is just goofy.
Many I know who have opted out reason thus:
1. good stewardship is a prinicple of my faith
2. the system is poor stewardship
3. ergo, if a person has a choice, our faith commends that he not participate
So, to these folks, “economic reasons” and “religious objections” are one and the same, since He is to be Lord of all.
I’m not saying I buy this reasoning, but I do find it plausible.
Views expressed are always my own and not my employer's, my church's, my family's, my neighbors', or my pets'. The house plants have authorized me to speak for them, however, and they always agree with me.
Though a pastor pays the self-employment tax, a church ought to still contribute what a secular employer does for an employee. My church has done this for me and pastors before me by having a “Social Security Offset” added to every check. Doing this would keep a pastor from having to pay the entire self-employment sax.
So I am interested, for those who opted out, on what basis do you object to receiving money, based on your income as a pastor, from public insurance in the event of sickness or death?I opted out back in 1980 when I took my first Pastorate. As I recollect all of the pastors (multi-pastor church) had opted out.
I opted out with a clear conscience and I could do so today.
In 1996 I left the vocational ministry and have paid into SS since. I still have the IRS form 4631. Were I to reenter the vocational ministry I would not pay into social security.
Rationale for opting out:
- It’s socialism
- It’s not a government ordained function
- My government provided a choice and I selected to opt out
- I was not a CO about serving
- I had a [URL=http://en.wikipedia.org/wiki/Selective_Service_System] 2S deferment[/URL] during my college days
- Upon graduation from college (June 1971) I was 1-A (Available for unrestricted military service) but not drafted
[Jonathan Charles] Though a pastor pays the self-employment tax, a church ought to still contribute what a secular employer does for an employee. My church has done this for me and pastors before me by having a “Social Security Offset” added to every check. Doing this would keep a pastor from having to pay the entire self-employment sax.This is a myth. The church cannot offset the 7.65% that they do not pay because anything they contribute must be added to the pastor’s gross salary line. For example, a church sets a pastor’s salary at $20,000 and “offsets” 7.65% of that with $1,530. The church may think they are helping the minister, but all they are doing is increasing his gross salary by $1,530. Meaning, when he calculates his SE tax he uses $21,530 as his salary. His SE tax is 15.3% of $21,530 or $3,294 rather than 15.3% of $20,000 or $3,060. The church cannot technically offset the pastor’s salary because any amount they contribute must be added to the gross salary (box 1 of form W-2).
Father of three, husband of one, servant of the Lord Jesus Christ. I blog at mattolmstead.com.
Yes, you have to pay taxes on it. “Social Security Offset” is just a name for another category of salary. But you are wrong to deem it a false attempt to help the minister out. Using your illustration, a pastor is helped out by the church contributing $1,296 ($1,530 less $234) rather than contrubuting nothing. And anyone paying the self-employment tax gets to adjust down their gross income by half of the self-employment tax (line 27 sch. 1040). The issue pastors are going to face may not be having an income in retirement. Many may be faithfully saving what they would otherwise be contributing to Social Security. The issue will be with health care.
As far as the excuse that Social Security is not going to be there when I retire is bogus. Social Security and Medicare is a sacred cow in our country. Rates that workers have to pay in will go up. Retirement age will be raised since we are living longer, but I have no doubt that it will be around in 30 years.
As far as the excuse that Social Security is not going to be there when I retire is bogus. Social Security and Medicare is a sacred cow in our country. Rates that workers have to pay in will go up. Retirement age will be raised since we are living longer, but I have no doubt that it will be around in 30 years.
I have often wondered what could possibly be the logical basis for allowing only pastors to opt out. What about a farmer who has the same struggle over receiving public insurance in return for his farming labors? Why only give pastors the opportunity to go through this exercise in conscience?
The entire system is godless, corrupt and opposed to logic. It was built on socialistic principles and is a “good investment” only for people who cannot do math (or politics).
Regarding the recent posts, I would reiterate the word of caution I posted earlier: Don’t try dealing with this unless you have an accountant on your side who is an expert in the tax law for clergy. I would urge anyone reading this thread who is considering getting out of Social Security not to rely on “the pastor in the next town” for advice, but rather to meet with a tax expert for clergy and get ALL the information ASAP before you do (or don’t do) anything related to opting out of Social Security.
I would recommend the Worth Tax Service in Warsaw, Ind. (www.worthfinancial.com)
The entire system is godless, corrupt and opposed to logic. It was built on socialistic principles and is a “good investment” only for people who cannot do math (or politics).
Regarding the recent posts, I would reiterate the word of caution I posted earlier: Don’t try dealing with this unless you have an accountant on your side who is an expert in the tax law for clergy. I would urge anyone reading this thread who is considering getting out of Social Security not to rely on “the pastor in the next town” for advice, but rather to meet with a tax expert for clergy and get ALL the information ASAP before you do (or don’t do) anything related to opting out of Social Security.
I would recommend the Worth Tax Service in Warsaw, Ind. (www.worthfinancial.com)
Church Ministries Representative, serving in the Midwest, for The Friends of Israel Gospel Ministry
If Larry is right [and I have no reason to doubt him!] , and the law says:
Then aren’t ministers not only opting out of Social Security, but also Medicare / Medicaid?
Personally, I don’t think that I could opt out because of the way it’s worded - I fall into the Aaron Blumer category. :(
FWIW, I *believe* that my teachers at NBBC and BJU advocated that ministers stay IN, not out.
I certify that I am conscientiously opposed to, or because of my religious principles I am opposed to, the acceptance (for services I perform as a minister, member of a religious order not under a vow of poverty, or a Christian Science practitioner) of any public insurance that makes payments in the event of death, disability, old age, or retirement; or that makes payments toward the cost of, or provides services for, medical care.
Then aren’t ministers not only opting out of Social Security, but also Medicare / Medicaid?
Personally, I don’t think that I could opt out because of the way it’s worded - I fall into the Aaron Blumer category. :(
FWIW, I *believe* that my teachers at NBBC and BJU advocated that ministers stay IN, not out.
"Our task today is to tell people — who no longer know what sin is...no longer see themselves as sinners, and no longer have room for these categories — that Christ died for sins of which they do not think they’re guilty." - David Wells
[Paul J. Scharf] I would recommend the Worth Tax Service in Warsaw, Ind. (www.worthfinancial.com)
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