H.R. 227: Clergy Act

The bill, known as the Clergy Act, aims to provide a process for certain members of the clergy to revoke their existing exemption from Social Security coverage. Currently, ordained ministers, members of religious orders, and Christian Science practitioners can opt out of Social Security. This legislation allows them to change their minds after previously choosing this exemption.

Key Provisions

• Eligibility for Revocation: The bill specifies that eligible clergy members can revoke their exemption from Social Security by filing an application. This is applicable only if the exemption was effective for the tax year when the bill is enacted.
• Application Deadline: Applicants must submit their revocation application no later than the due date for federal income tax returns (including extensions) for their second taxable year starting after December 31, 2027.
• Effective Dates: The revocation can affect either the first or second taxable year after December 31, 2027, as specified in the application, and will apply to all subsequent taxable years.
• Payment of Taxes: If the revocation application is filed after the tax return due date and is effective for that taxable year, it must be accompanied by payment of the taxes that would have been applicable to the applicant's income had they not chosen the exemption.

Implementation and Reporting

• Coordination with the IRS and Social Security Administration: The bill requires the Commissioner of Internal Revenue to work with the Commissioner of Social Security to create a plan for informing eligible clergy members about their ability to revoke their exemption.
• Report to Congress: A report outlining this plan must be submitted to relevant congressional committees within 90 days after the bill becomes law.

Summary

In summary, the Clergy Act enables certain clergy members who have previously opted out of Social Security to revoke that choice, under specific conditions and within a given timeframe. It establishes a formal process and the necessary administrative steps to facilitate this change in status.

Relevant Companies

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