Should ordained pastors/ministers opt out of self employment taxes (i.e. Social Security and Medicare taxes)?
Not unless you meet extremely rare requirements. None of which include the following:
- Social Security benefits won’t be available when I retire
- It’s poor stewardship of God’s money
- I can do a better job investing than the government
- It’s not the governments job to take care of people
- Extra cash in the pocket!
In order to opt out you agree to:
I certify that I am conscientiously opposed to, or because of my religious principles I am opposed to, the acceptance (for services I perform as a minister, member of a religious order not under a vow of poverty, or a Christian Science practitioner) of any public insurance that makes payments in the event of death, disability, old age, or retirement; or that makes payments toward the cost of, or provides services for, medical care. (Public insurance includes insurance systems established by the Social Security Act.)
~IRS Form 4361
That statement is extremely wordy so let’s look at a more simplified version taken from the bold sections above.
I am conscientiously opposed to the acceptance of any public insurance that makes payments in the event of death, disability, old, age or retirement.
If you sign Form 4361, you’re saying you’re conscientiously or religiously opposed to accepting public insurance. In other words, as a pastor, you believe it’s wrong to receive Social Security during retirement or have medical expenses covered under Medicare.
The form is asking if you’re against receiving public insurance.
That’s the key question to keep in mind. Not whether you think Social Security will be available when you retire or if you can do a better job investing. And as tempting as it is, opting out to get a bigger paycheck is not a valid reason to opt out.
So should pastors opt out? Consider this scenario…
Assume you’ve paid into the Social Security system for 50 years and you got your first Social Security check. Would you use the money or would you feel like you’re sinning against God if you did?
Do you see the difference in attitude?
If you have no problems cashing the check, that’s a clear sign you don’t have a religious or conscientious objection against receiving public insurance. A pastor should feel like they’re disobeying God if they have a genuine objection.
The military has a similar exemption for conscientious objectors. Prior to the exemption being available, people would go to jail for refusing military service because they believed war was wrong.
The heart of these exemptions are for those rare cases, not for the typical pastor.
Someone with a genuine objection to receiving public insurance would be willing to go to jail for that belief. They would refuse Medicare payments even if it meant paying for medical expenses out of pocket. Or they would rip up a Social Security check as soon as they got it.
“Even if I have to pay the taxes, I can never file for the benefits, since my theology will never allow me to accept them.”
~Memo #10 – Can Ministers Opt Out of Social Security?
The decision to opt out of social security should not be taken lightly.
~Evangelical Council for Financial Accountability
Read Form 4361. Don’t blindly accept the advice of others. Know what you are signing and saying yes to.
I highly recommend reading this article from Russell Moore for a very well argued and biblical response to whether ordained ministers/pastors should opt out.
Be sure whatever your decision, you can stand before Jesus with a clear conscious and a pure heart.
I think a great prayer in this situation is:
Create in me a pure heart, O God, and renew a steadfast spirit within me.
~Psalm 51:10 (NIV)
I pray we all have pure hearts and a steadfast spirit. Hearts not tempted by money and that strive to live according to God’s moral and ethical standards.
Sources and Additional Resources
- Is it Okay for Me to Opt Out of Social Security? My Response (highly recommended)
- Memo #10 – Can Ministers Opt Out of Social Security? (read section titled A “Catch” Often Overlooked)
- Ministers Opting out of Social Security (read bottom section after “Basis for filing for an exemption…”)
- On Opting out of the Social Security System
- Opting out of Social Security
I’d love to hear your reasons for either opting out or not. Please let me know in the comments!