Clergy Act

Bill Number

S. 639

Origin Chamber

Senate

Congress

119th Congress, Session 1

Policy Area

Social Welfare

Status

Introduced

Latest Action

2025-02-19: Read twice and referred to the Committee on Finance.

Last Updated

2026-06-12T13:18:30Z

AI-Generated Summary

Purpose of the Legislation

The Clergy Act (S. 639) aims to provide a limited window for certain religious workers—specifically, ordained, commissioned, or licensed ministers of a church, members of religious orders, and Christian Science practitioners—who previously opted out of Social Security coverage to revoke that exemption and participate in the program. This addresses retirement and disability benefits for those who may now want coverage after initially choosing exemption based on religious grounds.

Key Provisions

• Eligibility and Application Process: Eligible individuals can file an application with the Internal Revenue Service (IRS) to revoke their existing exemption from Social Security taxes on self-employment income. The application must be submitted no later than the due date (including extensions) of their federal income tax return for the second taxable year starting after December 31, 2027.
• Effective Date of Revocation: The revocation takes effect either in the individual's first or second taxable year after December 31, 2027, as chosen in the application, and applies to all future years. Once revoked, the individual cannot reapply for the exemption.
• Back Taxes for Late Filings: If the revocation is effective for a taxable year where the tax return is already due, the applicant must pay the full amount of Social Security self-employment taxes that would have been owed for that year, calculated as if the exemption never applied (excluding certain standard deductions).
• Scope of Coverage: Applies to services performed in taxable years beginning after December 31, 2027. It affects Social Security benefits (monthly insurance and lump-sum death payments) based on the individual's wages and self-employment income starting in the calendar year the revocation becomes effective.
• Reporting Requirement: Within 90 days of enactment, the IRS Commissioner, in consultation with the Social Security Administration (SSA) Commissioner, must submit a plan to Congress (House Ways and Means Committee and Senate Finance Committee) on how to notify eligible religious workers about this revocation option.

Significant Changes to Existing Law

• Under current law (Internal Revenue Code Section 1402(e)), exemptions from Social Security for clergy and similar roles are generally permanent and irrevocable once approved. This bill creates a one-time exception, allowing revocation despite that rule (explicitly overriding Section 1402(e)(4)).
• It introduces a specific deadline and payment mechanism for back taxes, which isn't available under prior rules, while prohibiting any future exemptions after revocation—reinforcing the "one-way" nature of the change.

Potential Impacts

• On Citizens: Primarily benefits eligible religious workers by allowing them to build Social Security credits for retirement, disability, or survivor benefits, potentially improving long-term financial security for those who regret opting out. However, it requires upfront payment of back taxes if applied retroactively to a current year, which could create a financial burden.
• On Government Agencies: The IRS will handle applications, tax calculations, and collections, increasing administrative workload. The SSA may see an influx of new contributors and future beneficiaries, potentially stabilizing or slightly boosting the program's funding without major fiscal strain (as it's voluntary). No direct impact on international relations.
• Broader Effects: Could encourage more clergy participation in Social Security, reducing reliance on church pensions or personal savings, but the narrow timeframe limits widespread adoption.

Main Stakeholders Affected

• Primary: Ordained ministers, members of religious orders, and Christian Science practitioners who previously filed for and received Social Security exemptions.
• Secondary: IRS (processes applications and taxes), SSA (administers benefits), and congressional committees (receive the notification plan).
• Indirect: Religious organizations (may see shifts in how they support clergy retirement) and taxpayers generally (minor effects on Social Security trust funds).

Notable Legal, Constitutional, or Political Implications

• Legal: Establishes a clear, time-limited procedural pathway for revocation, ensuring compliance with tax and Social Security laws while mandating full back-tax payment to avoid revenue loss. It maintains the voluntary nature of the exemption system.
• Constitutional: Balances First Amendment protections for religious freedom (by respecting past exemptions) with equal treatment under tax laws, avoiding any coercion into participation. No apparent challenges, as the option is opt-in only.
• Political: Bipartisan sponsorship (by Senators Britt and Hassan) suggests broad appeal for supporting vulnerable workers' retirement security. The required congressional report promotes transparency and outreach, potentially influencing future Social Security reforms for similar groups.

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

Sponsor

Sen. Britt, Katie Boyd [R-AL]

Cosponsors (3)

Sen. Hassan, Margaret Wood [D-NH], Sen. Coons, Christopher A. [D-DE], Sen. Lankford, James [R-OK]

Recent Actions

• 2025-02-19: Read twice and referred to the Committee on Finance.
• 2025-02-19: Introduced in Senate

Bill Versions

• Clergy Act — issued 2025-02-19 — PDF (5 pages)