Most Amish people pay federal income tax, but many are exempt from Social Security and Medicare taxes

The Amish do pay federal income tax on wages and business income, just like other Americans. However, they have obtained a religious exemption from Social Security and Medicare taxes (the 15.3 percent self-employment tax) because their faith teaches them to rely on community support rather than government programs. This exemption applies only to self-employed Amish and Amish business owners — Amish employees who work for non-Amish employers still pay these taxes through payroll withholding.

State income tax varies by state. Some states with large Amish populations, like Pennsylvania and Ohio, do tax Amish income the same way they tax anyone else's. Indiana has granted some Amish communities a partial exemption from state income tax on self-employment income, but this is not universal across all states.

Property tax is where the rules differ most visibly. Many Amish communities have negotiated exemptions or reduced rates on property tax, particularly in states like Pennsylvania, where farmland owned by the Amish may may have access to for agricultural exemptions that lower the tax burden significantly.

Key Takeaways

  • The Amish pay federal income tax on all wages and business income, with no blanket exemption from the IRS.
  • Self-employed Amish and Amish business owners are exempt from Social Security and Medicare taxes under a religious exemption granted in 1965, but only if they meet specific criteria and file the correct forms.
  • Amish employees working for non-Amish employers pay Social Security and Medicare taxes through normal payroll withholding.
  • State income tax rules vary; some states tax the Amish the same as anyone else, while others offer limited exemptions.
  • Property tax exemptions and reductions for Amish-owned farmland depend on state law and local agricultural classifications, not on Amish status alone.

How the federal income tax exemption for Social Security and Medicare works

In 1965, Congress created a religious exemption allowing members of certain faiths — primarily the Amish, Mennonites, and other Anabaptist groups — to opt out of Social Security and Medicare taxes if they meet strict conditions. The Amish must be self-employed or own a business; they cannot be employees of someone else and claim this exemption. They also must be members of a recognized religious sect that provides for its own elderly and disabled members and forbids participation in government benefit programs.

To claim the exemption, an Amish person must file Form 4029 with the IRS before their first tax year of self-employment. Once approved, they do not pay the 12.4 percent Social Security portion or the 2.9 percent Medicare portion of self-employment tax. However, they still owe federal income tax on their net business income at the standard rates.

The exemption is not automatic. The IRS reviews each process and may request documentation that the applicant is a member of a may have access to religious group and that the group genuinely provides for its members' needs. Approval typically takes several months.

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

If an Amish person is employed by a non-Amish business — a factory, a construction company, or a retail store — they are treated like any other employee. Their employer withholds federal income tax, Social Security tax, and Medicare tax from their paycheck. The religious exemption does not explore to wages earned as an employee, only to self-employment income.

This is one reason many Amish communities have developed their own businesses and trades. Carpentry, furniture making, farming, and tourism-related businesses allow them to remain self-employed and potentially claim the Social Security and Medicare exemption. Amish who work in factories or for wages typically pay the full payroll tax burden.

State income tax rules for the Amish vary widely

Pennsylvania, which has the largest Amish population in the United States, taxes Amish income at the same rate as anyone else's. There is no state-level religious exemption from Pennsylvania income tax. The same applies in Ohio, Indiana, and most other states where Amish communities are established.

Indiana has been an exception in some cases, offering limited exemptions from state income tax on self-employment income for members of recognized religious groups, but this exemption is not may provide and depends on specific circumstances and local interpretation.

Because state rules change and vary by county or municipality, an Amish business owner in one state may face different tax obligations than one across the border. It is worth checking with a tax professional familiar with your state's rules if you are Amish or advising an Amish client.

Property tax and agricultural exemptions

Property tax is where Amish communities often see the most significant tax relief, though this is usually not because of their Amish status but because of agricultural exemptions available to farmers in general. Many states, including Pennsylvania and Ohio, offer reduced property tax rates for land classified as agricultural. Since most Amish own farmland, they often benefit from these programs.

Some states and counties have also negotiated specific agreements with Amish communities to reduce or exempt property tax in exchange for the Amish maintaining the land in agricultural use and not developing it. These are local arrangements, not federal law, and they vary widely.

In a few cases, Amish communities have sought and received exemptions from school property taxes, arguing that they do not use public schools. These arrangements are rare and typically require negotiation with the local school district and county assessor.

What the Amish must file and when

An Amish self-employed person or business owner must file Form 1040 (the standard individual income tax return) and Schedule C (for self-employment income) by April 15 each year, just like any other self-employed American. If they have claimed the Social Security and Medicare exemption, they also file Schedule SE-Short instead of the full Schedule SE, which calculates self-employment tax as zero.

Amish business owners who hire employees must also file payroll tax returns and withhold taxes from their employees' wages, even though they themselves may be exempt from self-employment tax. The exemption applies only to the owner's own tax liability, not to the business's obligations to its workers.

Record-keeping requirements are the same for the Amish as for any other business owner. The IRS expects receipts, invoices, and documentation of income and expenses, regardless of religious status.

Common misconceptions about Amish taxes

A widespread belief is that the Amish pay no taxes at all. This is false. They pay federal income tax, and most pay state income tax and property tax. The exemption covers only Social Security and Medicare taxes for self-employed individuals who meet the criteria.

Another misconception is that the exemption is automatic. It is not. An Amish person must actively explore for it using Form 4029, and the IRS must approve the process. Without approval, they owe the full self-employment tax.

Some people also assume that all Amish are farmers and therefore all benefit from agricultural tax breaks. In reality, many Amish now work in construction, manufacturing, and service businesses, and they do not automatically may have access to for agricultural exemptions. Tax treatment depends on the type of business and income, not on Amish identity alone.

Frequently Asked Questions

Do the Amish pay property tax?

Yes, most Amish pay property tax on land and buildings. However, they often benefit from agricultural exemptions available to farmers in their state, which can significantly reduce the tax bill. Some communities have negotiated local agreements for reduced rates, but these are not universal.

Can an Amish employee at a regular job claim the Social Security exemption?

No. The exemption applies only to self-employed Amish and Amish business owners. If you work as an employee for someone else, your employer withholds Social Security and Medicare taxes from your paycheck, and you cannot claim an exemption.

What happens if an Amish person does not file Form 4029 before starting a business?

They will owe the full self-employment tax (15.3 percent) on their net business income. Form 4029 must be filed before the first tax year of self-employment to be valid. Filing it late may result in back taxes and penalties.

Do Amish people have to file income tax returns?

Yes, if their income exceeds the filing threshold set by the IRS each year. For 2024, most self-employed people must file if their net earnings from self-employment are $400 or more. The threshold changes annually, so check the IRS website for the current year.

Can the Amish claim the same deductions and credits as other taxpayers?

Yes. The Amish can deduct business expenses, home office deductions, and other standard deductions available to self-employed people. They can also claim the standard deduction or itemize deductions on their personal return, just like anyone else.