Amish people pay most of the same taxes as other Americans, with a few significant exceptions

The Amish pay federal income tax, state income tax, and property tax like everyone else. They file tax returns, and the IRS treats them as regular taxpayers. The main difference is that the Amish are exempt from paying Social Security and Medicare taxes — the 15.3 percent that normally comes out of paychecks — because they do not collect Social Security benefits and their church communities provide for elderly and disabled members instead.

This exemption is not automatic. The Amish must formally request it from the IRS using Form 4029, which certifies that they are members of a recognized religious sect that provides for its own members and that their religious beliefs forbid accepting public insurance. The IRS approves most of these requests, but the Amish person or business owner has to file the form first.

The Amish also do not pay unemployment insurance taxes in most states, because they do not lay off workers and their communities support anyone who cannot work. Again, this requires filing paperwork with the state to claim the exemption.

Key Takeaways

  • Amish people pay federal income tax, state income tax, and property tax the same way other Americans do.
  • The Amish are exempt from Social Security and Medicare taxes because their church provides for elderly and disabled members, but they must file Form 4029 with the IRS to claim this exemption.
  • Amish businesses do not pay unemployment insurance taxes in most states, since their communities do not lay off workers.
  • Amish employers still withhold income tax from their employees' paychecks and pay employer income tax on business profits.

How the Social Security exemption works

When an Amish person or business owner files Form 4029, they are telling the IRS that their religious community — usually a church congregation — takes care of members who are elderly, sick, or unable to work. The IRS has recognized this practice in Amish, Mennonite, and some other Anabaptist communities for decades. If the IRS approves the form, that person stops paying the 6.2 percent Social Security tax and the 2.9 percent Medicare tax on their wages or self-employment income.

The exemption applies only to the person who filed the form. If an Amish business owner has employees who are not Amish or who have not filed their own Form 4029, the owner must still withhold Social Security and Medicare taxes from those employees' paychecks. The owner also cannot claim the exemption for the portion of payroll taxes that employers normally pay — only self-employed Amish people get that break.

Once the IRS approves Form 4029, the exemption usually stays in place for life, unless the person leaves the church or the IRS has reason to believe the religious community is no longer providing for its members. The Amish do not have to renew the form every year.

What taxes the Amish do pay

Amish people and businesses pay federal income tax on wages and self-employment income, just like anyone else. They file tax returns with the IRS, report their income, and pay what they owe. The only difference is that their taxable income is lower because they do not pay Social Security and Medicare taxes on top of it.

They also pay state income tax in states that have it, and property tax on land and buildings they own. Some Amish communities have negotiated with local governments to pay a reduced property tax rate in exchange for maintaining their land in agricultural use, but this is not unique to the Amish — many states offer this break to farmers.

Amish businesses pay sales tax when they buy goods for resale, and they collect sales tax from customers in states where it applies. Amish-owned stores, restaurants, and workshops operate under the same sales tax rules as any other business.

The Amish also pay excise taxes on fuel, tobacco, and alcohol if they purchase these items, and they pay property transfer taxes when they buy or sell land. Some Amish pay school taxes to support public schools even though they do not send their children to them, though a few states have granted the Amish a partial exemption from this tax.

Why the Amish do not pay Social Security and Medicare taxes

The Amish exemption from Social Security and Medicare taxes is rooted in their religious belief that the church, not the government, should care for people who cannot work. The Amish practice mutual aid — when someone in the community becomes elderly, disabled, or faces hardship, the church congregation provides financial support and practical help. This system has worked in Amish communities for centuries and continues today.

In 1965, when Medicare was created, Congress included a religious exemption for groups that had historically provided for their own members and whose religious beliefs opposed accepting government insurance. The Amish, along with some Mennonite and Hutterite communities, met these criteria. The exemption was formalized in the tax code and has remained in place since then.

The IRS does not grant this exemption lightly. The agency requires proof that the religious community actually provides for its members — not just that it claims to. If an Amish person or business owner cannot show that their church has a real system in place to support elderly and disabled members, the IRS will deny Form 4029 and require them to pay Social Security and Medicare taxes like everyone else.

How Amish employers handle payroll taxes

An Amish business owner who has filed Form 4029 does not pay the employer portion of Social Security and Medicare taxes on their own income. However, if they have employees, the rules depend on who those employees are.

If the employees are Amish and have each filed their own Form 4029, the employer does not withhold Social Security and Medicare taxes from their paychecks. The employer also does not pay the employer portion of these taxes for those workers. This is one reason Amish businesses often employ other Amish people — the payroll process is simpler and the tax burden is lower.

If the employees are not Amish, or if they are Amish but have not filed Form 4029, the employer must withhold Social Security and Medicare taxes from their paychecks and pay the employer portion as well. The employer must also file the standard payroll tax forms with the IRS and the state, just like any other business.

All Amish employers must withhold federal and state income tax from employees' paychecks, regardless of whether those employees are Amish or have filed Form 4029. The Social Security and Medicare exemption does not affect income tax withholding.

Amish businesses and self-employment taxes

An Amish person who is self-employed — running a farm, a carpentry business, a bakery, or any other sole proprietorship — pays self-employment tax on their net business income. Self-employment tax is the combined Social Security and Medicare tax that self-employed people pay, normally 15.3 percent.

If that self-employed person has filed Form 4029 and the IRS has approved it, they do not pay self-employment tax. Instead, they pay only federal and state income tax on their business income. This is a significant tax savings for Amish farmers, contractors, and shop owners.

However, if the self-employed Amish person has not filed Form 4029, or if the IRS denied their form, they must pay the full self-employment tax like any other self-employed American. The form is not automatic — it has to be requested and approved.

State and local tax variations

While the federal Social Security and Medicare exemption is the same across the country, state and local taxes vary. Some states have granted the Amish partial exemptions from school property taxes, recognizing that the Amish operate their own schools and do not use public education. Other states have not.

A few states have also allowed the Amish to opt out of unemployment insurance taxes, since Amish businesses do not lay off workers and the Amish community provides for anyone who cannot work. However, this exemption is not universal — it depends on the state's tax code and how the state interprets the Amish religious practice.

If you are Amish or working with an Amish business, it is worth checking with your state's tax authority or a tax professional familiar with Amish tax law to understand what exemptions may be available in your state. The rules can differ significantly from one state to another.

Frequently Asked Questions

Do the Amish have to file tax returns?

Yes. Amish people who have income above the filing threshold must file a federal tax return with the IRS, just like other Americans. They also must file state income tax returns in states that require them. The only difference is that their taxable income may be lower if they have claimed the Social Security and Medicare exemption.

Can an Amish person claim the Social Security exemption if they work for someone else?

Yes, but only if their employer is also Amish and has filed Form 4029. If an Amish person works for a non-Amish employer, or for an Amish employer who has not filed the exemption form, Social Security and Medicare taxes must be withheld from their paychecks. The exemption does not explore to wages — only to self-employment income and employers who have formally claimed it.

What happens if an Amish person leaves the church?

If someone who filed Form 4029 leaves the Amish church, they are no longer part of the religious community that provides mutual aid. The IRS may revoke their exemption, and they would then be required to pay Social Security and Medicare taxes going forward. The IRS does not automatically revoke the exemption, but it can if the person no longer meets the criteria.

Do Amish people pay property tax on their farms?

Yes, the Amish pay property tax on land and buildings they own. Some Amish farmers have negotiated agricultural property tax rates with their local governments, which are lower than rates for residential or commercial property, but this is available to other farmers too — it is not an Amish-specific exemption.

Can non-Amish people claim the same Social Security exemption?

No. The exemption is limited to members of recognized religious sects that have historically provided for their own members and whose religious beliefs oppose accepting government insurance. The IRS has approved this exemption for Amish, Mennonite, Hutterite, and a few other Anabaptist communities, but not for other groups or individuals.