Religious Exemptions for Social Security and Healthcare Taxes Act

Bill Number

H.R. 4389

Origin Chamber

House

Congress

119th Congress, Session 1

Status

Introduced

Latest Action

2025-07-15: Referred to the House Committee on Ways and Means.

Last Updated

2025-07-24T01:38:21Z

AI-Generated Summary

Purpose

The legislation, titled the "Religious Exemptions for Social Security and Healthcare Taxes Act," aims to provide tax relief for employees who belong to religious faiths that oppose participation in federal insurance programs, specifically Social Security and Medicare. It extends existing exemptions for self-employed individuals to wage-earning employees by allowing credits or refunds of withheld taxes.

Key Provisions

• Eligibility and Application: Employees can apply for authorization to receive a credit or refund of taxes deducted under Section 3101 of the Internal Revenue Code (IRC), which covers the employee's share of Social Security (6.2%) and Medicare (1.45%) taxes on wages. Eligibility mirrors the criteria in IRC Section 1402(g)(1), typically applying to members of religious groups like the Amish or Mennonites that conscientiously oppose public or private insurance benefits.
• Authorization Process: Individuals must file an application, and approvals follow rules similar to those for self-employment tax exemptions. Once granted, the authorization applies for a specified period, with revocation rules akin to existing provisions.
• Refund Mechanism: Subject to IRC Section 31(b) (which handles overpayments), eligible employees can claim refunds for taxes withheld during qualifying taxable years.
• Effective Date: Applies to taxable years beginning after the date of enactment.

Significant Changes to Existing Law

• Amends IRC Section 6413 (which deals with credits or refunds of overcollected taxes) by adding a new subsection (e) specifically for federal insurance taxes.
• Expands religious exemptions previously limited to self-employment taxes (under IRC Section 1402(g)) to include employee wages, closing a gap where wage earners in qualifying faiths could not opt out despite their beliefs.
• Introduces application and authorization processes tailored for employees, without altering the core tax rates or employer obligations.

Potential Impacts

• On Government Agencies: The Internal Revenue Service (IRS) will need to process additional applications and refunds, potentially increasing administrative workload. The Social Security Administration may see slightly reduced revenue from contributions, though the affected population is small.
• On Citizens: Provides financial relief to a niche group of religious employees by refunding up to 7.65% of their wages in taxes, allowing them to adhere to faith-based principles without economic penalty. It does not affect employer payroll taxes or benefits eligibility for others.
• On International Relations: No direct impact, as this is a domestic tax policy focused on U.S. residents.

Main Stakeholders Affected

• Primary Beneficiaries: Employees who are members of qualifying religious faiths (e.g., those opposing insurance on moral or doctrinal grounds), enabling them to reclaim withheld taxes.
• Employers: Indirectly affected, as they continue withholding and remitting taxes but may need to adjust payroll processes for refunds; no change to their tax liability.
• Government Entities: IRS (handles applications and refunds) and Social Security Administration (impacted by revenue changes).
• Broader Society: Minimal overall effect due to the limited number of eligible individuals, but it supports religious communities while maintaining the integrity of social insurance programs for the general population.

Notable Legal, Constitutional, or Political Implications

• Legal: Strengthens consistency in tax exemptions by aligning employee and self-employment rules, potentially reducing litigation over unequal treatment. It relies on established IRC frameworks, minimizing new legal challenges.
• Constitutional: Advances free exercise of religion under the First Amendment by accommodating sincerely held beliefs, similar to prior Supreme Court rulings (e.g., on Amish exemptions). However, it could face scrutiny if viewed as favoring specific groups over the uniform tax system's goal of funding public benefits.
• Political: Promotes religious liberty, appealing to constituencies valuing faith-based policies, but may spark debate on equity in social welfare funding. As a targeted amendment, it avoids broad fiscal reforms, limiting partisan controversy.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Rep. Balderson, Troy [R-OH-12]

Cosponsors (2)

Rep. Smucker, Lloyd [R-PA-11], Rep. Miller, Max L. [R-OH-7]

Recent Actions

• 2025-07-15: Referred to the House Committee on Ways and Means.
• 2025-07-15: Introduced in House
• 2025-07-15: Introduced in House

Bill Versions

• Religious Exemptions for Social Security and Healthcare Taxes Act — issued 2025-07-15 — PDF (3 pages)