Few ministers can opt out of Social Security by meeting the strict IRS guidelines required for filing IRS Form 4361, Application for Exemption from Self-Employment Tax for Use by Ministers, Members of Religious Orders and Christian Science Practitioners.
Three copies of this form must be filed by the due date of the minister’s tax return for the second year in which the minister had net earnings from self-employment of at least $400, any part of which came from ministerial income. If the form isn’t filed by that date, it is too late to opt out. The IRS must approve the application. Many ministers do not understand the strict rules for opting out of Social Security. They may not even read the requirements for filing Form 4361 before signing it. Ministers cannot opt out of Social Security because they think it’s a bad investment. When filing Form 4361, a minister makes some representations under penalty of perjury. A minister must certify opposition on the basis of religious principles to acceptance of public insurance. That includes payments for death, disability, retirement or medical care. Ministers must certify that they have informed their ordaining body of their opposition to accepting public insurance benefits on the basis of religious principles. Few ministers will be able to meet these requirements.
Even for those ministers who meet all these requirements, careful consideration must be given before opting out of Social Security. Once the decision to opt out is made, it is irrevocable.
Pastors who choose to opt out of Social Security also lose access to other important benefits, including potential disability payments for themselves and payments to their surviving spouse or dependents in the event of their death. They will also be denied Medicare coverage when they reach age 65, forcing them to provide the entire cost of their health care.