Form 4029 Exemption: Qualifications, Filing, and What You Give Up

The Form 4029 exemption releases members of qualifying religious sects from paying Social Security and Medicare taxes, but the price is permanent: you waive every benefit those programs would ever pay you, your spouse, or your children based on your earnings. The exemption exists for people whose faith opposes all forms of insurance, public and private, and it is narrow by design.¹

Who Qualifies

Two sets of requirements have to be satisfied: one about your religious group, one about you.

The Group

Your sect or division must meet three conditions under federal law. Its established teachings must oppose accepting benefits from any private or public insurance covering death, disability, old age, retirement, or medical care, and that opposition must specifically include Social Security and Medicare. The group must have existed continuously since December 31, 1950. And it must have a demonstrated practice of providing a reasonable level of living for its dependent members.²

The Social Security Administration points to Amish and Mennonite communities as examples of groups that qualify, though other sects meeting the same criteria are eligible.³ Being part of a broader denomination is not enough on its own; the specific sect or division has to meet all three tests.

You

You have to be a genuine member of the qualifying group and personally follow its teachings against insurance. A personal preference against government programs will not do; the objection must be rooted in your sect’s tenets.

You also cannot have already received Social Security or Medicare benefits, and no one else can have received benefits based on your earnings. If any benefit has been paid at or before the time you file the waiver, you are ineligible.²

The Insurance Restriction Is Broader Than Social Security

One point that catches applicants off guard: the religious objection must extend to all private and public insurance covering death, disability, retirement, old age, or medical care. You cannot hold a commercial life insurance policy, a private disability policy, or a standard health insurance plan while claiming the exemption. The form itself has you certify that you are “conscientiously opposed to accepting benefits of any private or public insurance” covering those events.¹ If your group’s teachings permit members to carry commercial health insurance, the group does not meet the statutory definition and Form 4029 is not available.

What You Permanently Give Up

Signing Form 4029 waives all rights to benefits under Title II (Social Security retirement, disability, and survivor benefits) and Title XVIII (Medicare) of the Social Security Act.²

The waiver reaches backward, not just forward. Any Social Security credits you built up before the exemption was approved become unusable for benefit purposes. The SSA cannot count earnings posted before or during the exemption period when deciding whether you are insured or calculating a benefit amount.⁴ Ten years of prior contributions become a gap in your record.

The waiver reaches sideways too. While the exemption is in effect, no one can collect survivor benefits based on your earnings. A spouse and children lose access to any benefits that would otherwise flow from your work history. The premise is that your religious community will provide the support Social Security and Medicare would have.

How It Works for the Self-Employed and for Employees

The exemption was built around self-employment. If you are self-employed and your Form 4029 is approved, you stop paying the 15.3% self-employment tax (12.4% Social Security plus 2.9% Medicare). Approval applies retroactively to all qualifying taxable years.²

The exemption can also cover an employment relationship, with a critical condition: both you and your employer must be members of a qualifying religious group, and both must have approved Form 4029 applications on file. If your employer is not a member of a qualifying sect, your wages remain subject to Social Security and Medicare tax even if you personally qualify.⁵ When both sides qualify, the employer stops withholding the employee share and stops paying the employer share.¹

How to File

Form 4029 has two parts. Part I is yours: name, address, Social Security number, date of birth, and a signed statement, under penalty of perjury, that you are a member of a qualifying group, are personally opposed to accepting insurance benefits, and waive all Social Security and Medicare benefits.¹

Part II is signed by an authorized representative of your religious group, who identifies the congregation and certifies that you are a member and that the group meets the statutory requirements.

Send the original and two copies to:

Social Security Administration
Security Records Branch
Attn: Religious Exemption Unit
P.O. Box 7
Boyers, PA 16020¹

The IRS and SSA review the application together. Filing does not grant the exemption. Do not stop paying the tax until the IRS returns a copy stamped “Approved.”

Deadlines and Effective Dates

If you are self-employed, file Form 4029 by the due date of your tax return for the first year you have self-employment income and meet all the requirements. Approval then applies retroactively to qualifying years.⁴

For employees, the exemption begins on the first day of the first calendar quarter after the quarter in which the form is filed.¹ File in February, and coverage starts April 1.

If You Leave the Religious Group

The exemption is often called irrevocable, and in one sense it is: you cannot change your mind and opt back in while remaining a member of the qualifying group. But it does end if you leave the group or stop following its teachings. You must notify the SSA within three months and three days of the date you stopped adhering, and Social Security and Medicare taxes then apply to all future earnings.⁶

If you later join a different qualifying group, you have two years and three months after the end of the year you left the original group to file a new Form 4029. Miss that window and the exemption is gone permanently.⁶ Only earnings posted after the exemption ends can be used to rebuild insured status and qualify for benefits.⁴

Federal Income Tax Still Applies

Form 4029 does not exempt you from federal income tax. It covers only Social Security and Medicare. You still owe income tax on your earnings and file a federal return as usual.¹ On your Form 1040, write “Exempt—Form 4029” on the self-employment tax line so the IRS knows not to assess self-employment tax.⁷

Form 4029 Is Not Form 4361

Form 4361 is a separate religious exemption from self-employment tax, and it is meant for a different population: ordained ministers, members of religious orders who have not taken a vow of poverty, and Christian Science practitioners. Form 4029 is for lay members of recognized sects that oppose all insurance. Filing the wrong form results in rejection. A minister in a qualifying sect should file 4361, not 4029.⁸

1
Internal Revenue Service. Form 4029, Application for Exemption From Social Security and Medicare Taxes and Waiver of Benefits
2
Office of the Law Revision Counsel. 26 USC 1402 – Definitions
3
Social Security Administration. Are Members of Religious Groups Exempt From Paying Social Security Taxes
4
Social Security Administration. Filing Dates, Effective Dates and Termination of Exemption
5
GovInfo. 26 CFR 31.3127-1 – Exemption for Employers and Their Employees Where Both Are Members of Religious Faiths Opposed to Participation in Social Security Act Programs
6
Social Security Administration. Exemption From Social Security Taxes for Members of Religious Sects
7
Internal Revenue Service. About Form 4029, Application for Exemption From Social Security and Medicare Taxes and Waiver of Benefits
8
Social Security Administration. Verify the Individual on the IRS Form 4029