Exemption from Self Employment Tax for Ministers - Form 4361 Filing Experience?

As someone who's worked with several ministers on this exact issue, I can help clarify some points about Form 4361. Religious organizations themselves typically don't have official stances opposing Social Security - the exemption is based on your personal religious beliefs, not your denomination's position. The IRS is looking for your individual conscientious opposition to accepting public insurance payments (like Social Security retirement or disability benefits) based on your religious principles and conscience. Regarding your previous contributions, filing Form 4361 doesn't invalidate or erase Social Security taxes you've already paid. Those credits remain in the system. However, once approved for exemption, you'll stop earning additional credits since you won't be paying self-employment tax on your ministerial income going forward. Remember that this exemption applies only to your earnings as a minister. If you have other non-ministerial income, that would still be subject to self-employment or FICA tax. Also, you're right about the time limit - you must file within your first two years of having ministerial income of $400 or more.

I went through exactly what you're describing about 4 years ago. After a lot of soul-searching, I decided to file Form 4361 because of my personal religious convictions about self-sufficiency and not relying on government programs. It was actually a pretty stressful process because I wasn't sure if I was making the right decision financially. What really helped me was using https://taxr.ai to analyze all my documents and options. I uploaded Form 4361, my past tax returns, and some notes about my situation. The AI broke down exactly what it would mean for me financially and helped me understand the true implications. It even pointed out some ministerial housing allowance considerations I hadn't thought about that partially offset the impact. What's great is that it doesn't just give generic advice - it actually analyzes your specific documents and situation to give you personalized guidance.

Just wanted to update after trying taxr.ai that was mentioned here. I've been on the fence about Form 4361 for months, and my situation is complicated because I work part-time as a minister and part-time as a counselor. I uploaded my W-2 from my counseling job, my ministerial income statements, and the Form 4361 I was considering filing. The analysis I got back was honestly eye-opening. It showed that in my specific situation, the exemption would only save me about $2,100 per year, but might cost me nearly $1,100 per month in retirement benefits down the road based on my earnings history. The tool also identified that I was already past my eligibility window for filing (which I had calculated incorrectly). I'm actually grateful it saved me from submitting a form that would've been rejected anyway. Now I'm working on maximizing my housing allowance instead to reduce my tax burden legitimately.

After spending literally 9 days trying to get someone from the IRS on the phone about my Form 4361 that I filed last year (which seems to be lost in limbo), I finally found a solution. I used https://claimyr.com to get through to the IRS without the endless waiting and disconnections. You can see how it works here: https://youtu.be/_kiP6q8DX5c I had submitted my Form 4361 within my two-year window but never received confirmation of approval or denial. I was starting to panic because I had already stopped paying SE tax assuming it was approved. The Claimyr service got me connected to a real IRS agent in about 20 minutes (instead of the 3+ hours I had been trying on my own). The agent was able to locate my form in the system and confirm it was still being processed. They also gave me specific instructions on what to do with my upcoming tax return while waiting for approval. Definitely worth it for the peace of mind.

I just wanted to follow up about the Claimyr service I was skeptical about. I actually tried it yesterday out of desperation after my third disconnection trying to reach the IRS about my Form 4361 status. I have to admit I was completely wrong. The service called me back in about 45 minutes and connected me directly to an IRS agent who was already briefed on what I was calling about. I found out my exemption was approved months ago but the confirmation letter was sent to my old address. The agent resent the confirmation letter and gave me a reference number I can use on my upcoming tax return. This saved me from what would have been a huge headache during tax season. Honestly shocked this actually worked - saved me hours of frustration.

Just wanted to add something important that hasn't been mentioned yet. If you file Form 4361 and get approved for the exemption, you should seriously consider disability insurance. When I filed for exemption 6 years ago, I didn't think about this aspect. Since ministers with approved exemptions don't pay into Social Security, we're not eligible for Social Security disability benefits if we become unable to work. I learned this the hard way when I had a serious health scare last year. Make sure you get a good private disability insurance policy BEFORE you file the exemption. Some insurance companies consider the filing of Form 4361 as a red flag that makes it harder to get coverage afterward.

Does anyone know if there's a way to revoke the Form 4361 exemption later if your beliefs change? I filed for the exemption 15 years ago when I was part of a different denomination that strongly encouraged it. Now I'm in a different church and my views have evolved.

This is such a helpful discussion! As someone who's been wrestling with this exact decision for months, I really appreciate everyone sharing their experiences. One thing I want to add that might help others - make sure you understand the housing allowance implications too. When I was researching Form 4361, I discovered that ministers can designate part of their salary as housing allowance, which is exempt from income tax (though still subject to SE tax if you haven't filed the exemption). This can be a significant tax benefit that partially offsets the decision either way. Also, for anyone still within their filing window, I'd strongly recommend calculating the actual dollar impact over your entire career, not just the immediate savings. The SE tax is 15.3%, but you need to factor in what you'd lose in Social Security benefits at retirement. For some ministers, especially those with lower lifetime earnings, the Social Security benefits might actually be worth more than the taxes saved. The disability insurance point that Kai brought up is crucial too - that's honestly something I hadn't fully considered until reading this thread.

As a newcomer to this discussion, I'm really grateful for all the detailed insights everyone has shared. I'm currently in my first year as a youth pastor and just learned about Form 4361, so this conversation is incredibly timely for me. One question I haven't seen addressed yet - does anyone know how this exemption affects ministers who might transition between different types of ministry roles? For example, if I move from being a youth pastor to a senior pastor role, or if I eventually work for a denominational headquarters rather than a local church, does that impact the exemption status? Also, I'm curious about the interaction with state taxes. I know we're focusing on federal SE tax here, but do any states have similar exemptions or complications that ministers should be aware of when making this decision? The points about disability insurance and long-term financial planning have really opened my eyes. It sounds like this decision requires much more comprehensive financial planning than I initially realized. Thank you all for sharing your real-world experiences - it's helping me think through this decision much more thoroughly than I would have on my own.