Form 4029 must be filed on or before the due date for the first taxable year ending on or after 12/31/67 in which the individual has Self-Employment Income (SEI).

The effective date of the exemption begins with the first taxable year all requirements in RS 01802.271 and RS 01802.272 are met.

There is no provision in the Internal Revenue Code (IRC) for revoking an exemption; however, the IRC provides that the exemption ceases to be effective beginning with the year in which the individual and/or their religious group no longer meet the requirements. Further, when the individual files for a religious exemption/waiver they agree to notify the Internal Revenue Service (IRS) in writing within 60 days if a cessation event occurs.

Accordingly, section 202(v) (3) of the Act provides that the waiver provision ceases to be applicable with regard to the non-payment of benefits and other payments payable under Title II and Part A of Title XVIII to the extent of an individual's wages and or SEI for and after the calendar year in which the requirements of sections 1402(g) or 3127 of the IRC are not met.

When an individual files for a religious exemption/waiver (i.e., Form 4029) they agree to notify the IRS in writing within 60 days if a cessation event occurs.

However, a substantial number of applications for benefits are filed by individuals with approved religious exemptions/waivers in effect, who allege a cessation event occurred but never officially notified the IRS in writing of the cessation event. Most of the applicants allege that they believed or was advised by their accountant that the filing of the tax return and payment of the required SECA (Self-Employment Income Contributions Act) and/or FICA (Federal Insurance Contributions Act) taxes nullified the approved exemption. Therefore, there was no need to notify the IRS in writing of the cessation event. Further, the filing of the required tax returns reporting self-employment income and/or wages after the alleged cessation event occurs results in the individual being insured for social security coverage purposes.

Therefore, effective immediately, individuals with an approved religious exemption/waiver in effect who

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  file a claim for benefits,

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  allege that a cessation event occurred but

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  failed to notify the IRS of the cessation event,

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  resumed the filing of their tax returns after the cessation event occurred, and

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  acquired insured status based on the earnings (wages and/or self-employment income) posted for and subsequent to the effective date of the cessation event

should be paid benefits if the individual's work history and relevant evidence of record supports the individual's allegations regarding the alleged cessation event. Further, prepare a special determination to document the file and mail or fax a copy to the Social Security Administration, Security Records Center, ATTN: Religious Exemption Unit, P.O. Box 7, Boyers, PA 16020. The fax number is 833-719-0635.

Also place a copy of the determination in Non-Disability Repository for Evidentiary Documents (NDRED) using the Evidence Portal (EP).You can access the Evidence Portal (EP) at View Evidence - Evidence Portal (ssa.gov).

Note the following examples:

Constructive Notification - Break in Earnings

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  NH files rib application 12/30/98

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  “Q” indicator is present on the Numident (NOTE: the “Q” indicator is not present in all cases but a 4029 is present in the Correspondence File).

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  Form 4029 approved 12/15/66 by the IRS.

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  NH alleges that they left the Old Order Amish sect in 1972.

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  No letter of revocation in file.

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  NH was told by their accountant that the filing of their tax returns and/or payment of the required SECA (Self-Employment Contributions Act) or FICA (Federal Insurance Contributions Act) taxes would nullify the approved religious exemption/waiver.

  NOTE: For social security coverage purposes SSA is concerned with the “timely filing” of a tax return and not the payment of taxes. Therefore, if the earnings are posted to the earnings record it is assumed that the tax returns were timely filed. Therefore, the NH resumed the filing of their tax returns in 1973.

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  NH's earnings record shows no earnings 1966-1971

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  Self-Employment earnings shown 1972 to 2002.

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  Therefore, it is determined that the evidence of record supports the NH's allegation that they left the Old Order Amish sect in 1972 and resumed the filing of their income tax returns and reporting of their self-employment earnings. Accordingly, a cessation event took place in 1972 which nullified the NH's approved religious exemption/waiver and the NH's eligibility to entitlement/benefits should be determined based on earnings posted to the earnings record effective with the year the cessation event occurs (i.e., 1972) and all years thereafter.

  NOTE: Earnings posted prior to the approved 4029 exemption/waiver period and during the exempt period cannot be used to determine insured status or for computation purposes.

Constructive Notification - No break in earnings or Letter/Allegation of Revocation

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  NH files rib application 8/27/03.

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  “Q” indicator on Numident.

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  Form 4029 approved 3/82.

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  No letter of revocation in file and no allegation of a cessation event

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  No break in earnings record after approval of Form 4029.

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  Earnings record shows all wage postings 1982 – 2002 except for tax year 1998 where SEI is posted.

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  Obviously the NH did not understand the full ramifications of the approved 4029 religious exemption/waiver since they continued to file their income tax returns and earn substantial wages 1982 to 2002. It is conceivable that the NH believed that the exemption only applied to their SEI and that they could continue to work and earn wages. The Form 4029 does not distinguish between a request for an exemption from the payment of SECA or FICA taxes. Accordingly, it must be concluded that the cessation event occurred when the NH continued to report earnings after the approved exemption became effective or that the NH concluded that they were exempt from the payment of SECA taxes and could continue to earn wages. Therefore, social security benefits could be paid based on earnings posted for tax year 1982 and after.

Constructive Notification – No break in earnings – Allegation of Revocation in File

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  NH files for rib 12/4/02

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  Social Security Statement sent 8/14/02

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  “Q” indicator present on Numident

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  Claim for rib benefits denied 2/2/03(approved exemption/waiver in effect)

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  Form 4029 approved by IRS 5/26/67

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  NH alleges working for the same employer since 11/68. NH's earnings record confirms the NH's allegation.

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  Form 2031(Revocation of Exemption From Self-Employment Tax For Use by Ministers, Members of the Religious Orders and Christian Science Practitioners) filed 6/18/02 in error by NH. There is no form to request revocation of an approved Form 4029; ergo, NH's frequently file the Form 2031 in error. In some instances the Form 2031 is accepted and approved by the IRS. Conversely, in some situations the form is returned to the NH and a letter requesting revocation is requested. Further, the NH believed that the filing of the Form 2031 was sufficient to revoke their approved Form 4029. It is safe to conclude that the NH did not know that they filed the wrong form and that if they] filed a proper request for revocation of an approved Form 4029 that the approved request would only be effective prospectively. Nevertheless, in this case scenario, the filing of the Form 2031 is a moot issue since constructive notification of a revocation could be found based on the NHs' allegation that they worked for the same employer since 1968 and the continuous reporting/posting of wages since 1968 as alleged. Therefore, the cessation event occurred in 1968.

No Constructive Notification

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  NH's files a rib claim in 1/4/91

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  “Q” indicator on record for NH

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  NH has an approved 4029 dated 3/4/67 in Correspondence File

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  IRS approved NH's request for revocation with an effective date of 10/5/95

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  No allegation of an earlier cessation event

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  No break in earnings effective with tax year 4029 approved (3/67) or after

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  Application denied because NH is not insured based on earnings posted 1995 and after