The Amish pay most taxes but are exempt from some

The Amish pay federal income tax, state income tax, and property tax like other Americans. They file tax returns and send payments to the IRS. The major difference is that the Amish are exempt from Social Security and Medicare taxes — the 15.3 percent that normally comes out of paychecks — because they do not receive Social Security or Medicare benefits.

This exemption is not automatic. The Amish must formally request it from the IRS using Form 4029, and they must show that their religion forbids accepting government benefits. Once approved, they stay exempt as long as they remain members of an Amish community and do not claim benefits later.

The exemption applies only to self-employed Amish and those who work for Amish employers. If an Amish person works for a non-Amish business, they pay Social Security and Medicare like anyone else, unless their employer has already filed the exemption paperwork on their behalf.

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 only if they file Form 4029 with the IRS and their request is approved.
  • The exemption requires proof that the person's religion forbids accepting government benefits, and it applies only to self-employed Amish and those working for Amish employers.
  • If an Amish person works for a non-Amish employer, they pay Social Security and Medicare taxes unless the employer has filed the exemption on their behalf.
  • Amish communities still pay sales tax, property tax, and federal income tax like everyone else.

Why the Amish are exempt from Social Security and Medicare

The Amish exemption comes from a 1965 law that allows members of certain religious groups to opt out of Social Security if their faith teaches self-sufficiency and community care. The Amish fit this description because their religion emphasizes mutual aid — the community supports elderly and disabled members rather than relying on government programs.

The law assumes that if someone is exempt from paying into Social Security, they will never claim benefits. Breaking that promise — filing for Social Security or Medicare after being exempt — can result in penalties and loss of the exemption. The IRS takes this seriously because the exemption is based on a religious commitment, not a tax loophole.

Other religious groups also may have access to for this exemption, including some Mennonite communities and the Old Order Brethren. The key requirement is that the group must have a history of caring for its own members without government help.

What taxes the Amish do pay

Amish people and businesses pay federal income tax on wages and business profits. An Amish farmer or craftsperson files a 1040 form and pays tax on their earnings just like anyone else. Self-employed Amish also file Schedule C to report business income.

They pay state income tax in states that have it. An Amish person living in Pennsylvania, Ohio, or Indiana pays state income tax on their earnings. The amount varies by state.

The Amish pay property tax on land and buildings they own. This is a local tax, and the rate depends on the county. Amish farmland is taxed the same way as non-Amish farmland, though some states offer agricultural tax breaks that the Amish can use.

They also pay sales tax when they buy goods in states that have it. An Amish person buying supplies at a hardware store pays the same sales tax as anyone else. Some states exempt certain items like food or farm equipment, and the Amish benefit from those exemptions too.

How the Social Security exemption actually works

To get the exemption, an Amish person or their employer must file Form 4029 with the IRS. The form asks for the person's name, Social Security number, and the name of their religious group. It also requires a statement explaining why their religion forbids accepting government benefits.

The IRS reviews the form and decides whether to grant the exemption. This usually takes a few weeks. Once approved, the exemption stays in place as long as the person remains a member of the community and does not claim benefits.

If an Amish person leaves their community or decides to claim Social Security or Medicare later, they lose the exemption. They then become responsible for paying back taxes and penalties on the years they were exempt. This is a serious financial consequence, which is why the Amish take the commitment seriously.

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

If an Amish person works for a regular business — a grocery store, a factory, or a construction company owned by non-Amish people — they normally pay Social Security and Medicare taxes like any other employee. Their employer withholds these taxes from their paycheck.

However, some non-Amish employers are aware of the exemption and will file Form 4029 on behalf of their Amish employees. This is less common than it used to be, and it requires the employer to understand the rule and be willing to do the paperwork. If the employer has not filed, the Amish employee pays the full tax.

An Amish person in this situation can ask their employer whether they have filed the exemption. If not, the employee can request that the employer file it, though the employer is not required to do so.

Amish businesses and self-employment tax

An Amish person who runs their own business — a carpentry shop, a bakery, a farm, or a furniture maker — pays self-employment tax unless they have filed Form 4029. Self-employment tax is the 15.3 percent that covers both the employee and employer portions of Social Security and Medicare.

Once Form 4029 is approved, the Amish business owner no longer pays self-employment tax. They still file a Schedule C to report their business income and pay federal income tax on the profit, but they skip the Social Security and Medicare portion.

This is a significant savings for Amish business owners. A person earning $50,000 from self-employment would normally pay about $7,650 in self-employment tax. With the exemption, that tax disappears, though they still owe federal income tax on the $50,000.

State and local taxes the Amish cannot avoid

Even though the Amish are exempt from federal Social Security and Medicare taxes, they cannot avoid state income tax, property tax, or sales tax. These are separate from the federal exemption and are not affected by Form 4029.

Some states have tried to give the Amish additional tax breaks — for example, exempting them from certain licensing fees or allowing them to opt out of state disability insurance. These vary by state and are not may provide. Pennsylvania and Ohio, which have large Amish populations, have some accommodations, but the rules differ.

The Amish also cannot avoid paying taxes on vehicles they own, though they rarely own cars. If an Amish person buys a truck or a tractor, they pay the same registration and fuel taxes as anyone else.

Frequently Asked Questions

Do the Amish pay property tax?

Yes. The Amish pay property tax on land and buildings they own, at the same rate as non-Amish property owners in the same county. Some states offer agricultural tax breaks that the Amish can use if they farm the land, but there is no blanket exemption for Amish property.

Can the Amish claim the exemption if they work for a non-Amish company?

Not automatically. If an Amish person works as an employee for a non-Amish business, they pay Social Security and Medicare taxes unless their employer has filed Form 4029 on their behalf. This is uncommon, so most Amish employees at non-Amish companies pay the full tax.

What happens if an Amish person claims Social Security after being exempt?

They lose the exemption and become liable for back taxes and penalties on all the years they were exempt. The IRS treats this as a serious breach of the religious commitment that justified the exemption in the first place.

Do Amish children pay taxes?

Amish children who work and earn income must file a tax return if their earnings exceed the standard deduction, just like any other child. If they work for an Amish employer or are self-employed, they may be exempt from Social Security and Medicare taxes if Form 4029 has been filed for them.

Can the Amish avoid sales tax?

No. The Amish pay sales tax on purchases in states that have it. There is no religious exemption from sales tax, though some states exempt certain items like food or farm equipment, and the Amish benefit from those general exemptions.