Clergy Act
Summary
The Clergy Act allows members of the clergy to revoke their exemption from Social Security coverage. This revocation would be applicable for taxable years beginning after December 31, 2028. The Act also mandates a report to Congress on informing clergy members about their eligibility to revoke this exemption.
Expected Effects
The primary effect is to provide clergy members with a window to opt back into Social Security. This could impact their retirement benefits and tax obligations. The Act also requires the IRS and Social Security Administration to develop a plan to inform clergy about this option.
Potential Benefits
- Allows clergy to potentially increase retirement benefits by participating in Social Security.
- Provides flexibility for clergy whose financial situations may have changed since initially opting out.
- Could increase Social Security contributions, potentially strengthening the system.
- Mandates improved communication from the IRS and Social Security Administration to clergy members regarding their options.
- Ensures that those who revoke their exemption and later file taxes will have those taxes applied to their social security benefits.
Potential Disadvantages
- Requires clergy to pay Social Security taxes if they revoke their exemption, reducing their current income.
- Could create administrative burden for the IRS and Social Security Administration.
- May not benefit clergy who are already close to retirement age.
- Could lead to confusion or regret for clergy who revoke their exemption without fully understanding the implications.
- Those who revoke their exemption and later file taxes will be required to pay the full amount of taxes owed.
Constitutional Alignment
The Clergy Act appears to align with the US Constitution. It does not violate the Establishment Clause of the First Amendment, as it provides an option for clergy members rather than mandating participation in Social Security. The Act falls under the powers granted to Congress in Article I, Section 8 to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).