30 Jun The Clergy Act: A Second Chance for Pastors Who Opted Out of Social Security

The Clergy Act: A Second Chance for Pastors Who Opted Out of Social Security

A lot of pastors made the same decision, and they made it young and that decision was opting out of social security. The salary was small and opting out put real money in the bank account. Sometimes a mentor suggested it. Sometimes the denomination did. Sometimes an advisor ran some quick math that made it look like the obvious call. So you filed the paperwork and moved on.

What almost nobody explained at the time is that the door locks behind you.

A bill moving through Congress right now could change that, at least for a while. It’s worth understanding before that window opens, because the decision it creates won’t be the same for every pastor.

Why So Many Pastors Opted Out in the First Place

Under current law, ordained, commissioned, or licensed ministers can apply to the IRS for an exemption from self-employment (SECA) taxes on their ministerial income. The exemption is filed on Form 4361, usually early in a minister’s career, and it’s grounded in religious or conscientious objection to participating in public insurance programs.

The trade-off is straightforward on paper. You stop paying into Social Security and Medicare on your ministry income, and in exchange you give up those benefits in retirement. For a young pastor with a modest salary, the immediate relief is easy to feel and the cost is decades away, which is exactly why the long-term math so often went unexamined.

That math compounds quietly. Many ministers reach retirement age with no Social Security income from their years of ministry, no Medicare eligibility earned through that work, and if they die early, no survivor benefits for a spouse or kids. What started as an “I’ll put money away for retirement soon” often got pushed off for other pressing money matters in life. That gap is what the Clergy Act is trying to close.

What the Clergy Act Would Actually Do

If it becomes law, the bill opens a two-year window covering the 2029 and 2030 tax years during which eligible clergy could revoke their old exemption and start participating in Social Security and Medicare again.

A few things are worth being clear about. Coming back in is a choice, not a requirement; the bill keeps the original religious-conscience protections intact and simply restores the option. There’s also no buying back the past. Clergy who opt in start paying SECA tax going forward, and there’s no provision to backdate or make up the missed years. The standard rules still apply too, which means a pastor needs roughly ten years of contributions (the usual 40 quarters) to earn full retired-worker benefits, and anyone who contributes less receives benefits proportional to what they paid in.

Opting Back In Won’t Always Be the Right Move

This is where the headlines tend to oversimplify. The Clergy Act creates an opportunity, not an answer, and whether a given pastor should take it depends almost entirely on their own situation.

Age and time horizon do most of the heavy lifting here. A pastor with fifteen or more working years ahead has a very different calculation than one who’s a few years from retirement and may never reach the ten-year threshold at all. Paying into a system you won’t contribute to long enough to draw full benefits from is a real risk worth taking seriously.

What you’ve already built matters just as much. Many clergy who opted out didn’t just pocket the savings, they redirected those dollars into denominational retirement plans. For some, opting back in strengthens an already-solid retirement picture. For others, it duplicates coverage they’ve effectively recreated on their own.

What’s Worth Doing Before the Window Opens

The pastors who come out of this ahead will mostly be the ones who thought it through early, not the ones scrambling once 2029 arrives. A few things are worth doing now while there’s no time pressure.

Start by confirming your actual status, because a surprising number of ministers aren’t certain whether they ever filed Form 4361 or are currently exempt. From there, it’s worth estimating what ten years of SECA contributions would cost against the benefit you’d realistically earn, and weighing that against what you’ve already saved elsewhere. Don’t leave your spouse and family out of that math either — survivor and spousal benefits quietly tip a lot of these decisions and are easy to overlook. And if you do decide to opt back in, it touches your church’s payroll, withholding, and recordkeeping, so it’s a much smoother conversation to have with church leadership ahead of time than in a year-end scramble.

Where the Clergy Act Stands — and Whether It’ll Pass

So, the obvious question: is this actually going to happen?

The House side looks about as strong as legislation gets. H.R. 227 cleared the Ways and Means Committee unanimously and then passed the full House 350 to 5 on April 27, 2026, a genuinely rare margin for anything touching taxes and Social Security. It’s bipartisan, co-led by Reps. Vince Fong and Mike Thompson, and it’s picked up endorsements from groups as varied as AARP, the ECFA, and the U.S. Conference of Catholic Bishops. There’s real, broad goodwill behind it.

The catch is the Senate. The companion bill, S. 639, was introduced back in February 2025 and has been sitting in the Finance Committee since, with no recorded action. That’s not a sign of opposition so much as the ordinary reality that a non-urgent, narrowly scoped bill can stall simply because nothing forces it onto the calendar. Strong House passage gives it momentum and a talking point, but the Senate still has to take it up, and there’s no guarantee on the timing.

It’s also worth remembering how rarely Congress does this. The last few opt-in windows came in 1977, 1986, and 1999 — roughly once a decade, and sometimes longer. If the Clergy Act passes, its window runs just two years before closing again, probably for a long stretch.

None of which is a reason to rush a decision. It’s a reason to be ready. The cost of getting this wrong, in either direction, is measured in decades, and the pastors who do well by it will be the ones who treated it as a planning question early — while there was still time to do the math.

Talk to a Finch Advisor →

This article is for informational purposes only and does not constitute tax, legal, or financial advice. Clergy considering whether to opt back into Social Security should consult a qualified advisor about their specific situation.