How to Opt Out of Social Security
To opt out of social security is available ONLY if the minister is opposed to the receiving of social security benefits because of their religious beliefs. Opposition to the payment of the self-employment tax is not one of the conditions that must be met before a minister can opt out of social security using form 4361.
Conditions to Opt Out of Social Security using Form 4361:
1) Must be an ordained, commissioned, or licensed by a church.
2) The church or denomination must be a tax-exempt religious organization.
3) Must be opposed to receiving social security benefits on the basis of their religious principles or because they are conscientiously oppose to it.
4) Must file an IRS Form 4361.
5) Must file the 4361 by the due date of the federal tax return for the second year in which a minister has net earnings of $400 or more from self-employment. Any part or all of the self-employment must be from services performed in the exercise of their ministry.
6) Must inform their church or denomination that they are opposed to social security coverage for their services performed in the exercise of their ministry.
7) Must sign and return the IRS “verification” statement within 90 days of receiving it. This “verification” statement certifies that they are requesting an exemption based on the grounds listed in the statement. No form 4361 application for exemption will be approved unless the IRS “has verified that the individual applying for the exemption is aware of the grounds on which the individual may receive an exemption….and that the individual seeks an exemption on such grounds.”
Important: an exemption is effective ONLY when the minister receives back one of the three 4361 forms (it is file in triplicate) from the IRS marked “approved”.
Keep this “approved” form 4361 in a very safe place such as a safety deposit box as you must have it if you are ever audited.
I have received several inquiries on whether or not an individual minister can still collect SS benefits even if they had opt out of social security years ago, so I would like to answer this concern here instead of individually =)
First of all, I always recommend you call your local SS office and set up an appointment with a SS benefit specialist. I am not a SS expert and the answer depends on individual circumstances; however, there are a few things that may help to know before you make that call.
1) Even though you have opted out of social security by filing a form 4361 and was approved...that exemption does not apply to "non-ministerial" wages, so if you have earned at least 40 credits, you will be entitled to benefits.
2) If you don't have enough credits and have opted. out, you can still work a secular job and earn those credits.
There are some pretty good articles that may help, but please don't take everything you read at face value! Contact a SS benefit expert and discuss your particular case with them. Here is a few of those articles that may help:
WHAT PASTORS NEED TO KNOW ABOUT SOCIAL SECURITY EVEN IF THEY’VE OPTED OUT
4 Reasons Why Ministers Should Opt-Out of Social Security
CAN PASTORS OPT BACK INTO SOCIAL SECURITY?
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Comments on the IRS Form 4361
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Archive of Form 4361 Questions (& Answers)
The following comments, tips, and Q/A were provided by FreeChurchAccounting's generous readers:
Which EIN, my local church or my denomination?
Which EIN is better to use? Should I use the EIN of the local church from which I am receiving a salary or the Denominations EIN?
How to opt back in to paying social security taxes on clergy income
I have a client that opted out of paying in social security taxes on his clergy income.
Now as he is approaching retirement, he would like to start …
Should I file a tax extension?
April 15th 2021 will be the “2 year deadline” for me to file so I will be sending mine in this month (Jan 2021).
If it takes longer than 3 months to …
Does your church or denomination have to sign anything when you inform them of the opting out?
We are paying someone to help us with the completion of form 4361. They are asking me to send a 'letter of intent to exempt'. This form needs a signature …
2 year rule
My husband and I went into ministry 6 years ago. When I filed our taxes with H&R Block, I inquired about why we were paying self-employment taxes.
…
Receiving Social security benefits for secular employment while working as a minister
I have worked a secular job 20 years before becoming a minister if I file 4361 will I still be able to receive the benefits paid into social security …
Approved 4361, Does the church have to pay the Social Security
If a pastor has an approved 4361 does the church have to pay the Social Security Match?
Vickey's Reply:
With or without an approved 4361, a church …
What's the difference between form 4361 and form 4029?
Every I see says to fill out form 4361 to opt out of social security. However this form doesn't say social security, it says "Exemption from Self-Employment …
Opt back in to SECA
Is there an IRS form for clergy to opt back into SECA? Or do they simply start paying self-employment taxes on Schedule E? Will this trigger an audit? …
Denied Opt Out
I was denied my request to opt-out of Social Security. Does anyone have experience with the appeals process?
Past ss taxes due
I was approved for ss exemption in Sept. but I don’t think any ss had been taken out of my paychecks for the year?
Does this mean that I owe ss taxes …
How do I obtain from the IRS an Approved copy of Form 4361 if the original was lost?
Is there an IRS address I can send a letter to obtain a copy of the Approved Form 4461 as the original has been lost?
No longer ordained form 4361
I filed form 4361 years ago, but as of 2016 I am still self-employed but am no longer an ordained minister. What do I do when I file? Do I simply begin …
Clergy exempt from Self-employment tax BUT WANTS to start paying SE tax
Searching for answers. Clergy already approved for exemption from social security tax. Wants to now be in the social security system.
Still has ONLY …
Duplicate copy of my 4361 approval letter.
Please advise if their is a way to receive a duplicate copy of my 4361 approval letter. I have searched the internet
Which information do they want?
Do they want the ordaining Church information (adress, EIN,etc.)...or the Church I am actually a pastor at information???
How should I file pending approval?
How should I file my taxes for this year, as we have sent in the 4361 but have not yet received the approval letter. Since more than likely taxes will …
If I opted out can I still get benefits if I pay on my non ministerial income?
If I opted out can I still get benefits if I pay on my non ministerial income?
I was only a few credits away from being eligible for Social Security …
Housing Allowance excluded for Social Security Tax
I read on your page that if the minister opts out for social security (form 4361) this Housing Allowance income is also exempt from social security tax. …
Do I pay FICA on the portion of my salary that is not tax exempt?
I currently took on a full time position at a church making a salary that exceeds my housing costs and therefore only a portion of my salary is considered …
once approved how long is minister exempt from se tax on earnings
Once form 4361 is approved how long is minister exempt from SE tax on earnings?
can you opt back in after you file form 4361
Can you opt back into SS after filing form 4361?
already have full time job want to opt out of ssi for new part time pastor job
i currently am employed full time for a company with an excellent retirement plan and i pay into ssi. i have recently become a part time pastor in a major …
Opt back into Social Security after changing denominations.
I am a pastor. My previous church "encouraged" me to opt out of social security. I've changed denominations, and will soon be receiving ministerial pay. …
Changed denominations and ordained again does the 2 year window start over?
I was ordained a Pastor 6 years ago under one denomination but did not opt out. Now several years later, I've been ordained under a new denomination. …
Does opting out of Social Security affect Obamacare?
I am about to be ordained and am leaning toward opting out of Social Security because I believe it is a bad stewardship of God's money. However, would …
Changed denominations/new 4361?
I am changing denominations. I currently have an approved 4361 from my previous denomination. Do I need to submit another one?
Exempt from Social Security/eligible for Medicaid?
If I'm exempt from Social Security tax as a pastor, am I ineligible for state Medicaid?
Life insurance or disability insurance....
Does opting out of social security prevent a pastor from having life insurance or disability insurance?
due date for form 4361
I have a question about the due date for form 4361 for ministers requesting exemption.
I was ordained in 2012 and received income greater than $400 …
Denominational change criteria to re-open two year window
I worked for a small, non-denominational missionary organization in Texas from 2007-2009. I received a housing allowance, but did not opt out of social …
How do i know if I have been approved?
How do i know if I have been approved? Who do I contact to check status? Ask questions?
Line 5 of form 4361
I'm confused about what exactly is supposed to go in line 5. A date, income amount, or other?
Staff Soc Sec and Medicaid match
If the church decides to opt out of Social Security and Medicaid for clergy, do they still have to pay the employee portion for non-clergy or is that portion …
Horns of a dilemma if a pastor opt out
Why would pastors react to the IRS Form 4361 (opt out of social security) as the horns of a dilemma?
Opt Out of Social Security Question
If a minister chooses to Opt Out of Social Security with IRS using Form 4361, does this mean he will not receive SS at retirement age?
revocation of exemption of social security
How does a minister revoke their exemption from paying social security taxes?
Two Year Window Rule
So I am a bit confused on the idea of the two year window. I was just ordained a couple weeks ago so do I wait 2 years before filing or do I need to file …
Income in excess of Social Security limit
I have opted out of Social security years ago after entering the ministry. I worked at numerous secular jobs prior to entering minstry and therefore have …
How should I be taxed
I am the owner of an LLC taxed as an "s" corp. I am also an employee of the company as an ordained minister providing spiritual counseling. The company …
Have approved 4361 but there are social securiy and medicare tax withheld on w2
I have approved 4361, which I obtained in the middle of 2011. I have been ordained since 2010 but I filed and got approved 4361 during 2011. I see that …
From Minister to Regular Employee?
If I have a regular job at another business, and I've exempted with form 4361, will I receive the money that is taken out of my paycheck for social security, …
4361
I have changed denominations. In my previous denomination, we were under a vow of poverty and thus did not pay into Social Security. In my new denomination, …
Requesting a Copy of my 4361
I need to find out if I filed 4361 several years ago, but can't remember. Is there a place to call to request a copy of this?
Medicare Taxes
Is the minister still able to get medicare benefits in case of injury? Will he still need to pay the appropriate taxes?
Know the answer? Face the …
Filing Form 4361
We are a small church and was not aware of the two year window on form 4361. Is this a hard and fast rule? Can there be some extenuating circumstances …
Exempting from SE Tax
Question regarding Form 4361:
I am a fairly new minister and am afraid I have missed the deadline for filing a form 4361. Are their any extensions …
The comments above are for general information purposes only and do not constitute legal or other professional advice on any subject matter. See full disclaimer.
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