The Clergy Act Is Now Law: What Pastors Need to Know

At Thrive, we serve churches, private schools, and nonprofit organizations. This particular update concerns eligible clergy, but you may know someone it could affect: your pastor, a chaplain, a colleague, or a family member. Even if it doesn’t apply to you personally, sharing it could help someone begin an important financial conversation.

For pastors who opted out of Social Security early in ministry, there is meaningful news to celebrate: the Clergy Act has been signed into law, creating a limited opportunity to revisit that decision.

Signed on October 20, 2026, the law allows eligible ministers to revoke their exemption and resume participation beginning with tax year 2029 or 2030. For families who have wished they could reconsider an earlier decision, this opens an important door.

It also creates an opportunity to start a thoughtful conversation about retirement, taxes, and caring for the people who serve our churches.

What Does the Clergy Act Change?

A minister’s exemption from Social Security coverage on ministerial earnings is generally irrevocable. The Clergy Act provides a temporary opportunity for eligible clergy to reverse that exemption.

Under the law, ministers can elect to return to coverage effective in 2029 or 2030. The application deadline is tied to the due date of their federal income tax return for the second taxable year beginning after December 31, 2028, including extensions. For ministers who file on a calendar-year basis, that means the filing deadline for their 2030 return.

Once made, the decision to revoke the exemption is permanent. The law also directs the IRS, in consultation with the Social Security Administration, to develop a plan to notify eligible clergy.

The opportunity is real, and there is time to prepare carefully.

Will Pastors Need Another 10 Years of Work?

This is an important detail to understand.

Social Security retirement benefits generally require 40 credits, typically earned over at least 10 years of covered work. But those do not necessarily have to be 10 new years after opting back in.

Credits earned through previous covered employment remain on a person’s Social Security record. A pastor who worked outside ministry may already have credits that count toward retirement eligibility. The number of credits determines eligibility; the earnings record helps determine the benefit amount.

That is why reviewing your own record matters. Two pastors of the same age could be approaching this opportunity from very different financial circumstances.

What Should Pastors Do Now?

My encouragement is simple: celebrate the opportunity, then begin gathering the information you need to evaluate it.

Review your Social Security earnings history. Find out what covered earnings and credits are already on your record. Start with the facts rather than an assumption about what you might qualify for.

Look at your family’s retirement plan. Consider your savings, anticipated retirement age, spouse’s situation, and expected income needs. Where might Social Security fit into that picture?

As you evaluate this opportunity, ask: How could returning to coverage affect my Medicare eligibility and our household’s health-care costs in retirement? Confirm your eligibility and enrollment timing with Social Security or Medicare rather than assuming that opting out means no coverage, or that returning guarantees premium-free coverage.

Discuss the tax impact. Returning to coverage means planning for the associated taxes on ministerial earnings. Ask a tax professional familiar with clergy taxation to help you understand what that could mean for your household budget.

Follow the implementation guidance. As the IRS provides instructions, pay attention to the application process and deadlines. Use the time ahead to prepare for an informed decision.

This deserves prayer, good information, and counsel from professionals who understand the unique financial questions that come with ministry.

Who do you know who may have opted out of Social Security early in ministry? Your pastor, a chaplain, or a ministry colleague may appreciate knowing there is an opportunity to reconsider. If you serve on a church staff, finance committee, or board, help this news reach the ministers you support. You don’t need to have every answer. Sharing and encouraging a conversation is a meaningful first step. Know someone this could affect? Share this with them.

Build Your Understanding of Ministers’ Taxes

The Clergy Act is also a reminder of how much there is to understand about clergy taxation.

Want a stronger foundation in ministers’ taxes? My Minister’s Tax Course covers ministerial status, housing allowances, self-employment taxes, Social Security exemptions, and estimated payments. It can help Minister’s Ask better questions when making these decisions.

I’ll continue following the Clergy Act as implementation guidance becomes available. Subscribe to my weekly blog for future updates and practical guidance.