A Penny Saved

In a previous Post (Social Security Statement - 11/4/07), I mentioned that I was considered self-employed for Social Security purposes because I was a pastor. One of our astute readers asked a very good question. Here is her comment/question:

You fail to mention that as a pastor you had the opportunity to opt out of the social in-security system altogether, something the rest of us don’t have as an option. I would jump at the option and yet not one clergy member I have ever known has opted out…is there some explanation for volunteering to participate in a system that most everyone else wants out of??

Good question! Let me try to explain. Before 1968, a pastor was not eligible to be part of Social Security unless they chose to file a Form 2031 - Waiver Certificate to Elect Social Security Coverage. So pastors were not covered at all (or taxed!) unless they chose to waive their right from exemption. After 1968, the government reversed the process: pastors were automatically part of the system and considered self-employed unless they opted out. To opt out, a pastor must file form 4361 - Application for exemption from Self-employment Tax.

On the form, a pastor must sign the following:

“I certify that I am conscientiously opposed to, or because of my religious principles I am opposed to, the acceptance 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.”

Most pastors that I know (including me), cannot sign this waiver. We may hate social security for financial reasons, but not because of conscience or religious principles. And the waiver is not just opposition to Social Security, but to any public assistance/insurance. And I think that is what the government is banking on. Also, if you are part of a denomination, and all the other pastors cannot sign off, and you do, the IRS will look into it. I know I really struggled with this at the time. And you only have a small window of opportunity to opt out - the second year of service.

So because of conscience and religious principles, I cannot sign the form that would liberate me from tyranny and taxation. O well. One more sacrifice of being a pastor. Of course the benefits after death are pretty good!