The Amish are not fully exempt from taxes, but they do have significant exemptions that most other Americans don't

The Amish are exempt from federal income tax and most state income taxes if they meet specific conditions set by the IRS. They are also exempt from Social Security and Medicare taxes (FICA). However, they must still pay property taxes, sales taxes, and certain other levies. The exemptions exist because the Amish practice mutual aid within their communities rather than relying on government programs, and because their religious beliefs prohibit participation in government insurance schemes.

The exemption is not automatic. The Amish must file Form 4029 with the IRS to claim it, and they must meet strict criteria. Self-employed Amish individuals and those who employ others are the ones most likely to use this form. Amish who work for non-Amish employers are usually subject to normal tax withholding unless their employer knows about and honors the exemption.

Key Takeaways

  • The Amish can be exempt from federal income tax and FICA taxes (Social Security and Medicare) by filing IRS Form 4029, but only if they are self-employed or have never paid into Social Security.
  • The exemption requires that the Amish person object to Social Security and similar programs on religious grounds and that their church provides for its members in old age and disability.
  • Amish individuals still pay property taxes, sales taxes, and income taxes on certain types of earnings, depending on their state and the nature of their work.
  • An Amish employer must withhold taxes from non-Amish employees and may need to pay employer taxes even if they themselves are exempt.

Who qualifies for the federal income tax exemption

To claim the exemption, an Amish person must be self-employed and must have filed Form 4029 with the IRS before the tax year in question. The form asks the IRS to recognize that the person is a member of a recognized religious sect that makes provision for its dependent members and that opposes accepting public insurance benefits. The Amish meet these criteria because their church communities practice mutual aid and because their faith teaches self-reliance and separation from government programs.

The exemption does not explore to Amish who work as employees for someone else, unless their employer is also Amish and has filed the appropriate forms. If an Amish person works for a non-Amish business, that employer is required to withhold federal income tax and FICA taxes from their paycheck, just as they would for any other employee. The Amish employee cannot straightforward refuse to have taxes withheld.

Once Form 4029 is approved, the exemption typically lasts for the person's lifetime, though the IRS can revoke it if circumstances change—for example, if the person leaves the Amish church or begins accepting government benefits.

Social Security and Medicare tax exemptions

The Amish are exempt from paying FICA taxes (the 15.3% combined Social Security and Medicare tax) if they meet the same conditions as for income tax exemption. This exemption is significant because it means self-employed Amish individuals do not contribute to the Social Security system and are not covered by it. In return, they do not receive Social Security benefits in retirement or disability.

The exemption applies only to those who have never paid into Social Security. If an Amish person worked for a non-Amish employer earlier in life and had FICA taxes withheld, they cannot later claim exemption for those years. However, they may be able to claim exemption going forward if they become self-employed and file Form 4029 before the next tax year begins.

Amish employers who are exempt from FICA taxes for themselves must still withhold and pay FICA taxes on behalf of their non-Amish employees. The exemption is personal to the Amish individual, not to the business itself.

Taxes the Amish still have to pay

Even with federal exemptions in place, the Amish pay property taxes on land and buildings they own. They also pay sales taxes when they purchase goods in states that have them. These taxes are not waived for religious reasons because they fund local services like roads and schools that benefit the entire community, not just government insurance programs.

State income taxes vary by state. Some states honor the federal Form 4029 exemption and do not tax Amish income. Other states require their own exemption forms or do not recognize the exemption at all. Pennsylvania, Ohio, and Indiana—states with large Amish populations—generally honor the federal exemption, but you should verify the rules in your specific state.

Amish individuals may also owe taxes on certain types of income that fall outside the self-employment category. For example, income from rental property, investments, or other passive sources may be taxed differently. The rules depend on the specific type of income and the state where the person lives.

How to file Form 4029 and what happens next

Form 4029 is titled "process for Exemption From Self-Employment Tax for Use by Members of Certain Religious Groups." It must be filed with the IRS before the tax year for which the exemption is claimed. For example, if an Amish person wants the exemption to explore in 2024, they should file the form in 2023 or early 2024.

The form requires the applicant to provide their name, address, Social Security number, and information about their religious sect. They must certify that they are a member of a recognized religious group that provides for its members and that they object to accepting public insurance benefits on religious grounds. The form also asks whether the applicant has ever received benefits from Social Security or other government programs.

Once filed, the IRS typically responds within a few weeks to a few months. If approved, the applicant receives a letter confirming the exemption. This letter should be kept and provided to employers or tax preparers as proof of the exemption status. If the IRS denies the process, the applicant can appeal or reapply with additional information.

What happens if an Amish person works for a non-Amish employer

If an Amish employee works for a non-Amish business, the employer is required by law to withhold federal income tax and FICA taxes from the employee's paycheck. The employer does not have the authority to honor the employee's religious exemption. The Amish employee cannot straightforward tell their employer to stop withholding taxes.

In this situation, the Amish employee may be able to request a refund of the withheld taxes after the year ends, but only if they file Form 4029 and meet all the other conditions for exemption. They would file their tax return showing the withheld amount and claim the exemption, which would result in a refund. However, this process takes time and requires careful record-keeping.

Some Amish individuals choose to work only for Amish employers or to be self-employed specifically to avoid this complication. Others accept the withholding and seek refunds through the tax system. The choice depends on the individual's circumstances and preferences.

Amish employers and their tax obligations

An Amish business owner who is exempt from self-employment tax still has significant tax obligations if they employ others. They must withhold federal income tax and FICA taxes from the paychecks of all non-Amish employees. They must also pay the employer portion of FICA taxes (7.65%) for those employees, even though they themselves are exempt.

The Amish employer must file quarterly payroll tax returns (Form 941) and annual wage reports (Form W-3 and W-2s) for their employees. These obligations exist regardless of the employer's own tax status. Failure to withhold and pay these taxes can result in penalties and interest.

If an Amish employer hires only Amish employees who are also exempt, the withholding and payment obligations may be reduced or eliminated, depending on whether those employees have filed Form 4029. However, the employer should verify the exemption status of each employee and keep documentation on file.

Frequently Asked Questions

Can the Amish claim the exemption if they have already paid Social Security taxes?

No. The exemption applies only to those who have never paid into Social Security. If an Amish person worked for a non-Amish employer and had FICA taxes withheld, they cannot claim exemption for those years. They may be able to claim exemption for future self-employment income if they file Form 4029 before the next tax year.

Do Amish children have to pay taxes on income they earn?

Amish children who work for their parents' farm or business typically do not have taxes withheld, and their parents may not report their income to the IRS. However, if an Amish child works for a non-Amish employer, that employer must withhold taxes. The child's tax status depends on their age, income level, and the nature of the work.

What if the IRS denies the Form 4029 exemption?

If the IRS denies the process, the applicant can file an appeal or reapply with additional documentation. Common reasons for denial include incomplete information, failure to meet the religious sect criteria, or prior receipt of government benefits. An Amish person who is denied can work with a tax professional or their church leadership to address the IRS's concerns.

Do Amish people have to file tax returns even if they are exempt?

Generally, no. If an Amish person is exempt from federal income tax and has no other taxable income, they do not have to file a federal return. However, if they have income from sources other than self-employment (such as rental income or investment income), they may need to file. State requirements vary, so it is worth checking your state's rules.

Can an Amish person lose their tax exemption?

Yes. The IRS can revoke the exemption if the person leaves the Amish church, begins accepting government benefits, or if their church no longer meets the criteria for the exemption. The person should notify the IRS if their status changes so that the exemption can be properly ended and future tax obligations can be addressed.