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April 28, 2021
Question

What if my employer doesn't pay social security tax because they are exempt. How do i get exempt?

  • April 28, 2021
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Employee
April 28, 2021

Not sure what you mean by the employer being "exempt" or how you expect to become exempt from paying Social Security or Medicare.

 

 

Are you working as an independent contractor for a person or business that is not withholding tax, Social Security or Medicare?    If so, you have to file as self-employed and pay self-employment tax to pay your own Social Security and Medicare.    

 

What kind of document is your income being reported on?   Did you receive a 1099NEC or 1099Misc?    Or a W-2?

 

 

https://ttlc.intuit.com/questions/2584365-am-i-an-employee-or-an-independent-contractor

 

https://ttlc.intuit.com/community/self-employed/help/what-is-the-self-employment-tax/00/25922

 

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**
April 28, 2021

I received W2, and I am trying to find out if should also get 1099NEC or 1099Misc.

 

The job is a non-profit and they contribute to some other Retirement for me.

Employee
April 28, 2021

Let's make sure we know what we are talking about.

 

Generally, religious groups must withhold social security and medicare tax from their employees' wages even if the organization is exempt.  There are some exceptions.  See this article.

https://finance.zacks.com/groups-not-pay-social-security-system-8212.html

Certain religious organizations are morally opposed to accepting anything in the way of benefits from the government – the concept goes against their faith. They take the position that they provide perfectly well for their members without assistance, and that’s okay under federal law – as long as they do so.

This isn’t to say that you can just tell the Social Security Administration that your congregation will take care of you in the event of trouble and skip Social Security tax withholding from your paychecks – several rules apply.

First, the religious organization you belong to must make the short list of those that are officially recognized by the federal government for taking care of their own. The organization must have been in existence since Dec. 31, 1950, and it must have consistently provided for its members during that time. Mennonites and the Amish are good examples. You are not able to just launch a new faith and say you’re opposed to accepting help from the government so you can claim a Social Security exemption.

The organizations themselves must apply for this exemption by filing Form 4029 with the government, and even then, some of their members might not be exempt if they ever qualified for any type of Social Security benefits, even if they never collected them. Members must file Form 4029 as well to claim the exemption and doing so acts as a forever waiver of ever receiving any type of Social Security benefits in the future.

So what if you’re not a member of one of these faiths but you work for a qualifying religious organization? You’ll have to pay Social Security tax on your earnings over $100 a year, and you have to pay both halves just as you would if you were self-employed because the organization is exempt.

 

  1. Is this describing your situation?
  2. Are you saying that you have a W-2 with no withholding in box 4 and 6?
  3. Do you want to be exempt from Social Security?  You need to file form 4029?
  4. Do you want to pay the social security tax?

 

You don't need a 1099-NEC or 1099-MISC.  If you are a common law employee (they set your schedule and tell you what to do) then you only receive a W-2.  What you need to do is include a schedule SE with your tax return to pay self-employment tax on your wages, which is the equivalent of your Social Security and Medicare taxes.

 

Turbotax has a procedure for this situation.  After entering your W-2, check the box for "Religious Employment" on the page listing uncommon situations.  Next, indicated that you earned these wages for non-clergy religious employment, and then "pay self-employment tax on this W-2 income."