Do the Amish Pay Taxes? Yes, but Most Are Exempt From Social Security

Yes. The Amish pay federal and state income taxes, sales taxes, property taxes and school taxes. Most do not pay Social Security or Medicare taxes, because federal law exempts self-employed church members, and Amish who work for Amish employers, if they give up every Social Security and Medicare benefit.

Which taxes do the Amish pay?

The Young Center for Anabaptist and Pietist Studies at Elizabethtown College, which studies Amish life, calls the idea that the Amish pay no taxes a misperception. They pay “all the taxes—income, property, sales, estate, corporate, school—that other people do.” Many of them pay for schools twice, through public school taxes and through their support of private Amish schools.

The Young Center lists two exceptions. Congress exempted the Amish from Social Security in 1965, and some states also exempt them from workers’ compensation, the insurance that covers injuries on the job, for the same reason. Old Order, New Order, Swartzentruber and other Amish affiliations differ in their Ordnung, the largely unwritten rules of each church district, but tax law does not change from one affiliation to another. Income, sales and property taxes fall on every Amish household and Amish business as they do on their neighbors.

Why are the Amish exempt from Social Security?

The Amish regard Social Security as a form of insurance, and they refuse insurance benefits, whether commercial or government. They believe the Bible tells the church to care for its own members in need, including the elderly, and that relying on insurance would contradict their belief that God will care for them through the church. Elderly parents are cared for by their families, and when a household faces a large hospital bill, the congregation takes a special offering, collected by the deacon from each family in the district.

Edwin D. Lee, an Old Order Amish farmer and carpenter whose tax case reached the Supreme Court, gave 1 Timothy 5:8 as the scriptural basis for the belief: “But if any provide not for his own, and specially for those of his own house, he hath denied the faith, and is worse than an infidel.”

How the exemption came about

After Social Security was extended to self-employed workers in 1950, some Amish refused to pay the tax. The best-known case is that of Valentine Y. Byler, an Amish farmer from New Wilmington, Pennsylvania. The Internal Revenue Service put a lien against him and in 1961 seized three of his plow horses, which it auctioned to pay his Social Security share. The seizure made national news. In the Social Security Amendments of 1965, the law that also created Medicare, Congress added an exemption for self-employed members of churches that oppose insurance. It is now section 1402(g) of the Internal Revenue Code.

How does the exemption work?

The exemption is not automatic. Each person applies on IRS Form 4029, which is signed by the applicant and by an authorized representative of the church and sent to the Social Security Administration. The exemption is granted only if the IRS returns a copy marked “Approved.” The applicant waives all rights to Social Security and Medicare benefits, and no one else can later collect benefits on that person’s earnings. A person who has ever received benefits is not eligible unless the benefits are paid back.

Under section 1402(g), the Commissioner of Social Security must also find that the church meets three tests. Its teachings must oppose accepting benefits from any private or public insurance that pays for death, disability, old age, retirement or medical care. It must have a settled practice of making reasonable provision for its dependent members. And it must have existed continuously since December 31, 1950. The form’s instructions use “Old Order Amish” as an example of how to name the religious group.

The exemption covers Social Security and Medicare taxes only. The form carries the warning that “The exemption does not apply to federal income tax.” A member who leaves the church, or stops following its teachings, must tell the IRS within 60 days, and the exemption ends.

Do Amish employees pay Social Security?

The 1965 exemption covered only the self-employed. From 1970 to 1977 Lee employed other Amish on his farm and in his carpentry shop without withholding Social Security taxes or paying the employer’s share. In 1978 the IRS assessed him more than $27,000. He paid $91 and sued for a refund, arguing that the tax violated his religious freedom.

In United States v. Lee (1982) the Supreme Court ruled against him. Chief Justice Warren Burger wrote that “Congress drew a line in § 1402(g), exempting the self-employed Amish but not all persons working for an Amish employer,” and that “Granting an exemption from social security taxes to an employer operates to impose the employer’s religious faith on the employees.”

Congress widened the exemption in 1988 with section 3127 of the Internal Revenue Code. It applies only when the employer (or, in a partnership, every partner) and the employee are both members of a qualifying church and both hold approved exemptions. An Amish person who works for a non-Amish employer pays Social Security and Medicare taxes like any other employee, and an Amish employer must withhold them, and pay the employer’s share, for any worker without an approved Form 4029.

Why the Amish pay the other taxes

The Amish affirm the eighteen articles of the Dordrecht Confession of Faith, a Dutch Anabaptist confession written in 1632, and candidates for baptism review them. Its article on government tells believers to “faithfully pay custom, tribute, and taxes, and to render unto them their dues, even also as the Son of God taught and practiced, and commanded His disciples to do.” Among its proof texts are Romans 13:1–7 and Matthew 22:21, where Jesus answered a question about paying tribute to Caesar: “Render therefore unto Caesar the things which are Caesar’s; and unto God the things that are God’s.” Paul wrote in Romans 13:7, “Render therefore to all their dues: tribute to whom tribute is due; custom to whom custom.”

The same confession tells believers to pray for rulers. The Young Center notes that the Amish are taught to respect governing authorities, and that when conscience and civil law conflict they cite Acts 5:29, “Obey God rather than men.”

Do the Amish receive government assistance?

Members with an approved exemption receive no Social Security or Medicare payments, because they have waived them. The Young Center says the Amish “prefer not to receive subsidies from government programs.” When they are ill, Old Order Amish in Lancaster County, Pennsylvania, are treated at local hospitals and billed like anyone else, and they pay with help from church alms and, for an estimated 30 percent of them, a church-run plan called Amish Hospital Aid, founded in 1969.

Members of churches that qualify under section 1402(g) were also exempt from the Affordable Care Act’s requirement to carry health insurance. The penalty for going without insurance was reduced to zero from 2019.

Do Mennonites pay taxes?

Yes. Mennonites pay income, sales and property taxes. Conservative Mennonite churches can also qualify for the Social Security exemption, and the Form 4029 instructions give “Unaffiliated Mennonite Churches” and “Eastern Pennsylvania Mennonite Church” as examples. A few Mennonites, as a matter of conscience against war, withhold the share of their federal income tax that would pay for the military and tell the government why. Third Way, a Mennonite information site, notes that the IRS or the Canada Revenue Agency collects the money in the end, and that “It is a very small percentage of Mennonites who actually put this kind of action into practice.”

Related reading

• Do the Amish get marriage licenses?
• Do the Amish need building permits?
• Bible verses about government