TN 16 (06-04)
RS 01802.270 Services of Individuals Exempt From Social Security Taxes
A. POLICY - SELF-EMPLOYMENT
The Act excludes from the term “trade or business”, the services of individuals who have been exempted from the payment of self-employment tax on the grounds of religious belief under section 1402(g) of the IRC.
NOTE: Do not confuse this exemption with that available to ministers via an approved Form 4361. See RS 01802.061. Generally, only members of Amish or Mennonite congregations may qualify for this exemption via an approved Form 4029.
B. POLICY - WAGES
The Act exempts from Social Security taxation wages of employees who:
have an approved exemption from tax on religious grounds under 1402(g) of the IRC;
have waived their right to Social Security benefits and Medicare; and
have an employer who either meets the requirement of A. above, is a partnership in which all partners meet the requirements of A. above or is a church or church-controlled organization that has an approved exemption from taxation as described in RS 01901.660.
C. POLICY - EARNINGS RECORD
SSA cannot use earnings (i.e., wages or self-employment income) to determine an individual's eligibility to benefits or benefit amount for years that fall within the effective period; i.e., any earnings posted prior to the approved exemption/waiver and after the approved exemption/waiver. Only earnings posted for and after the effective date of a cessation event can be used to determine eligibility to benefits and benefit amount.