Quick Summary
What happened: President Trump signed the Clergy Act into law on October 20, 2026.
What it does: Pastors and ministers who previously obtained an exemption from self-employment taxes (IRS Form 4361) can now revoke it and begin paying Social Security and Medicare taxes on their ministerial wages again.
Not retroactive: The law does not provide any retroactive benefits.
Why it matters: Opting back in can help a minister reach the 40 quarters needed for Social Security retirement benefits, or increase the benefits they will receive.
Deadline: The revocation application must be filed with the IRS no later than the due date (including extensions) of the federal income tax return for the second taxable year after December 31, 2028.
Final decision: Once you revoke the exemption, you cannot apply for it again.
Working as a pastor or minister in America carries several advantages that are not available to workers in other industries. One of these is the ability to obtain an exemption from self-employment taxes (Social Security and Medicare taxes) on wages earned through service in ministry. Until recently, that choice was permanent. On October 20, 2026, President Trump signed the Clergy Act into law, giving exempt ministers a one-time opportunity to opt back in.
What Is the Ministerial Exemption From Self-Employment Taxes?
Generally, pastors and ministers may apply for this exemption if they have a religious objection to receiving Social Security payments from the government.
How to apply: The application is submitted on IRS Form 4361.
Application deadline: The due date of the minister's federal income tax return for the second year after the minister earns $400 or more from their work as a minister.
Permanence: As a general rule, this exemption is irrevocable (see 26 U.S.C. § 1402(e)(4)).
What Does the Clergy Act Change?
The Clergy Act allows ministers who previously obtained an exemption from self-employment taxes on their ministerial wages to revoke that exemption and begin paying self-employment taxes on those wages again. The new law does not provide any retroactive benefits.
How Do Pastors Revoke the Exemption?
Pastors who want to revoke the exemption will need to file the appropriate form with the IRS. Historically, this form was IRS Form 2031. However, as of publication, the IRS has not officially designated a specific form for filing a revocation under the Clergy Act.
How Can the Clergy Act Help Pastors Qualify for Social Security?
Under Social Security Administration rules, you are generally required to pay Social Security taxes for 40 quarters (10 years) of your working career to receive retirement benefits. Workers who have not paid Social Security taxes for at least 10 years are not eligible for retirement benefits until they reach that minimum.
For pastors and ministers who obtained an exemption before paying Social Security taxes for at least 10 years, the Clergy Act is an opportunity to meet that requirement and become eligible for retirement benefits in the future.
Keep in mind that the exemption only applies to ministerial wages:
Already qualified through secular work: If a pastor has already paid self-employment taxes for 40 quarters on secular wages, the pastor already qualifies to receive Social Security benefits.
Higher benefits: If an exempt pastor opts back in under the Clergy Act and continues paying self-employment taxes on ministerial wages, the amount of Social Security benefits the minister is entitled to will increase.
Two Things Pastors Should Know Before Opting Back In
1. The Deadline
The window provided by the Clergy Act will not stay open indefinitely. To revoke a previous exemption from self-employment taxes, a minister must file an application with the IRS no later than the due date for the minister's federal income tax return, including extensions, for the second taxable year after December 31, 2028.
2. The Decision Is Final
Ministers who revoke a previous exemption may not later apply for a second exemption from self-employment taxes. In other words, the decision to opt back in and pay self-employment taxes on ministerial wages is irrevocable.
Opting back in means the pastor or minister will pay self-employment taxes on ministerial wages at a rate of 15.3%. Those taxes are payable on both salary and housing allowance.
Clergy Act FAQs
When was the Clergy Act signed into law?
President Trump signed the Clergy Act into law on October 20, 2026.
Is the Clergy Act retroactive?
No. The law does not provide any retroactive benefits.
Does self-employment tax apply to a pastor's housing allowance after opting back in?
Yes. A pastor who opts back in will pay self-employment taxes at a rate of 15.3% on both salary and housing allowance.
Should a pastor opt back in if they already have 40 quarters from secular work?
A pastor who has already paid self-employment taxes for 40 quarters on secular wages already qualifies for Social Security benefits. Opting back in and paying self-employment taxes on ministerial wages would increase the amount of benefits the minister is entitled to.
Talk With a Church Lawyer About the Clergy Act
Church & Charity Law is here to assist churches, ministries, and their leaders with any legal needs that may arise. Call our office at (918) 392-1956 or contact us today to schedule a consultation.
Disclaimer: This article and all other content on this website are provided for general informational purposes and are not legal advice. To obtain legal advice concerning your specific circumstances, please contact our office.