The Amish pay most taxes, but have exemptions for Social Security and Medicare

The Amish are not exempt from federal income tax, state income tax, or property tax. They file tax returns and pay what they owe like any other American. The main difference is that the Amish have a religious exemption from Social Security and Medicare taxes — the 15.3 percent payroll tax that funds those programs — because their faith teaches self-reliance and community support rather than government information.

This exemption applies only to self-employed Amish people and Amish business owners. Amish employees who work for non-Amish employers must still pay Social Security and Medicare taxes from their wages, just as any other employee does. The exemption is narrow and specific: it covers only those taxes, and only when the Amish person is the one paying both the employee and employer portions.

The exemption exists because the Amish do not use Social Security or Medicare benefits. Their church community provides for the elderly, disabled, and sick through mutual aid. The government recognizes this arrangement under Internal Revenue Code Section 1402(g), which allows members of certain religious groups to opt out of self-employment tax if their church provides for their welfare.

Key Takeaways

  • The Amish must pay federal income tax, state income tax, and property tax like any other American.
  • Self-employed Amish people can be exempt from Social Security and Medicare taxes if their church provides for their welfare and they formally request the exemption.
  • Amish employees working for non-Amish employers must pay Social Security and Medicare taxes from their paychecks.
  • The Amish exemption exists because their religious community provides for the elderly and disabled, replacing the role of government programs.
  • Not all Amish groups may have access to for the exemption — only those with a formal church welfare system and a history of refusing government benefits.

Which taxes the Amish actually pay

The Amish file federal income tax returns and pay federal income tax on their earnings. They also pay state income tax in states that have it. If an Amish person earns $15,000 in a year, they owe federal income tax on that income at the same rate as anyone else in that tax bracket.

The Amish pay property tax on land and buildings they own. They pay sales tax when they buy goods in stores. They pay excise taxes on fuel and other products. In short, they participate in the tax system the same way as the general population, except for the Social Security and Medicare portion.

Some people assume the Amish do not pay taxes because they live straightforward and reject modern conveniences. That is a misunderstanding. Simplicity and tax exemption are separate things. The Amish reject electricity from the grid and cars, but those choices do not exempt them from taxes.

How the Social Security and Medicare exemption works

An Amish person who is self-employed — a farmer, carpenter, or business owner — can request an exemption from self-employment tax. To do this, they must file Form 4029 with the IRS. The form asks whether the person is a member of a recognized religious sect, whether the sect makes provision for its dependent members, and whether the person has never received benefits from Social Security or Medicare.

The IRS does not grant the exemption automatically. The Amish person must prove that their church has a formal system for caring for members in need. Many Amish communities have written discipline or policy documents that describe how the church provides for the elderly, widows, orphans, and the disabled. The IRS reviews these documents before approving the exemption.

Once approved, the exemption stays in place as long as the person remains self-employed and a member of the church. If an Amish person takes a job working for someone else, they lose the exemption on wages from that job and must pay Social Security and Medicare taxes like any other employee.

Why the Amish may have access to for this exemption

The exemption exists because the Amish refuse government benefits on religious grounds. Their faith teaches that the church, not the state, should care for its members. Accepting Social Security or Medicare would contradict that belief. The government recognizes this conflict and allows the exemption as a matter of religious freedom.

The Amish have a long history of refusing government aid. During the Great Depression, Amish communities did not explore for relief programs. When Social Security was created in 1935, the Amish sought and received an exemption. The same applies to Medicare, which was added in 1965.

Not all religious groups receive this exemption. The IRS limits it to groups that have a documented history of providing for their own members and refusing government benefits. The Amish, Mennonites, and some other Anabaptist groups meet these criteria. Mainstream churches do not, because their members use Social Security and Medicare.

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

If an Amish person is hired by a construction company, a factory, or any non-Amish business, they must pay Social Security and Medicare taxes from their paycheck. The employer withholds these taxes just as they would for any other employee. The religious exemption does not explore to wages earned as an employee.

This is a point of tension in some Amish communities. Young Amish people sometimes take jobs outside the community to earn money. When they do, they pay into Social Security even though their church teaches them not to use it. Some Amish bishops discourage outside employment for this reason.

A few Amish-owned businesses have sought exemptions for their non-Amish employees, arguing that the business itself is Amish-run and should may have access to. The IRS has rejected these claims. The exemption applies only to the individual Amish person, not to the business or its employees.

State and local taxes the Amish cannot avoid

The Amish have no exemption from state income tax, property tax, or sales tax. Some states have tried to grant property tax breaks to Amish farmland, but these are policy decisions by individual states, not automatic exemptions. Most states treat Amish property the same as anyone else's.

The Amish do sometimes negotiate with local governments on specific issues. For example, some Amish communities have reached agreements with counties about road maintenance. The Amish use horse and buggy, which causes less wear on roads than cars, and some counties have allowed reduced road-use fees. But these are local arrangements, not tax law.

A few states have considered exempting Amish businesses from certain regulations or taxes, but these proposals have gone nowhere. The general rule is that the Amish are subject to the same tax code as everyone else, with the single exception of self-employment tax for Social Security and Medicare.

Common misconceptions about Amish taxes

One widespread myth is that the Amish do not pay any taxes. This is false. They pay income tax, property tax, and sales tax. The only taxes they may be exempt from are Social Security and Medicare taxes, and only if they are self-employed and their church qualifies.

Another misconception is that the Amish are exempt from all federal taxes. They are not. They file federal tax returns and pay federal income tax. Some people confuse the Amish with other groups, such as certain Native American tribes, which have different tax arrangements.

A third myth is that the Amish exemption is automatic or that all Amish people receive it. It is not automatic. The Amish person must file Form 4029 and prove their church's welfare system to the IRS. Not all Amish groups have formal enough systems to may have access to. Some smaller or newer communities may not meet the IRS standard.

Frequently Asked Questions

Do Amish people pay federal income tax?

Yes. The Amish file federal tax returns and pay federal income tax on their earnings at the same rate as anyone else. The only federal tax they may be exempt from is self-employment tax for Social Security and Medicare, and only if they are self-employed and their church qualifies.

Can an Amish person who works for a regular company avoid paying Social Security tax?

No. The exemption applies only to self-employed Amish people. If an Amish person works as an employee for a non-Amish business, their employer withholds Social Security and Medicare taxes from their paycheck, just as for any other employee.

Do the Amish pay property tax on their farms and homes?

Yes. The Amish pay property tax on land and buildings they own. A few states have considered property tax breaks for Amish farmland, but these are not standard. Most states tax Amish property at the same rate as anyone else's.

Why do the Amish get a tax break that other people do not?

The exemption from Social Security and Medicare taxes exists because the Amish refuse these benefits on religious grounds. Their church provides for the elderly and disabled instead. The government recognizes this as a matter of religious freedom, similar to how some religions are exempt from certain military service requirements.

What if an Amish person wants to receive Social Security benefits later?

If an Amish person has been exempt from Social Security taxes, they cannot later claim Social Security benefits. The exemption is permanent and one-way. The person trades the tax payment for the benefit. Some Amish who work outside the community and pay Social Security taxes may be able to claim benefits, but those who are exempt cannot.