On October 20, 2026, the Clergy Act was signed into law, giving eligible ministers who previously opted out of Social Security and Medicare a temporary opportunity to opt back in.
For church leaders, this raises a few important questions about eligibility, payroll responsibilities, and how the change could affect their ministers’ financial futures.
Who is eligible under the Clergy Act?
Under previous law, ministers who received an approved exemption from Social Security and Medicare taxes on their ministerial earnings generally could not reverse that decision. The Clergy Act creates a temporary opportunity for eligible clergy to revoke their exemption, effective beginning in either the 2029 or 2030 tax year. The election must be filed by the deadline for the 2030 federal income tax return, including extensions.
This is voluntary and applies only to clergy with qualifying prior exemptions. Ministers who already participate in Social Security do not need to make a new election. Importantly, the decision to opt back in is permanent.
Will churches need to change how they handle payroll?
The short answer is no. The Clergy Act does not create new Social Security or Medicare tax withholding requirements for churches. Even when a minister is considered a church employee, their ministerial earnings are generally subject to self-employment tax rather than traditional employee payroll taxes. Ministers who choose to opt back in will be responsible for paying these taxes on their covered earnings.
This can have an impact on their personal tax obligations, particularly because clergy housing allowances are generally included when calculating self-employment taxes.
Should ministers consider opting back in?
We encourage ministers to evaluate this opportunity in the context of their broader retirement planning. Opting back in allows ministers to begin earning Social Security credits through their ministerial work. Generally, 40 credits are needed to qualify for retirement benefits, although credits earned through previous non-ministerial employment may also count. 40 credits equates to 40 quarters or roughly 10 years of covered employment.
Your age, existing credits, expected years of service, and additional tax obligations should all factor into your final decision. Because the election is permanent, we recommend reviewing these considerations with a tax advisor before making a decision.
Next Steps
There is no immediate action required, and the IRS is expected to release additional guidance on the election process. We expect that guidance to cover what forms need to be filed, opt-in election requirements, and what will establish participation.
In the meantime, we encourage church leaders to share this development with ministers who may qualify and give them time to evaluate their options. We also encourage ministers interested in the election to begin gathering information about their existing Social Security credits and earnings history.
If you have questions about how the Clergy Act may affect your church or its ministers, your Wegner CPAs advisor is here to help you navigate the changes.
