By Kelly M. Walsh, Esq.
In Central Pennsylvania, we are accustomed to seeing our Amish neighbors around the community, but one point on which many are unsure is whether Amish community members are held to the sametax responsibilities as everyone else.
What Taxes do the Amish Pay in PA?
The Amish are responsible for payingincome tax, sales tax, and real property tax. However, self-employed Amish do not pay Social Security tax. This includes those employed by non-Amish. Due to this, Amish do not collect benefits from Social Security, nor do they collect funds from unemployment. Being self-sufficient is their answer to government aid programs. Being exempt from certain taxes is because:
- Amish do not consume a service or product that taxes help pay for
- Due to religious purposes, Amish do not take advantage of government benefits or aid
Please note, that in order for an individual to receive these tax exemptions, they must join the Amish church.
What Taxes are the Amish Exempt From?
The Amish can be exempt from paying FICA, FUTA, and Self-Employment tax.
FICA stands for Federal Insurance Contributions Act, which funds Social Security and Medicare. FUTA stands for the Federal Unemployment Tax Act, which fundsunemployment benefits. Anyone who has been an employee is used to seeing those line items on their paychecks. Employers withhold those amounts from employee wages, and pay an employer portion, to fund the employee’s insured status for those benefits if the employee should meet other qualifications. People who are self-employed pay FICA taxes through their self-employment taxes, found on Schedule SE with their form 1040, to have insured status for Social Security and Medicare.
Exemption from FICA and FUTA taxes is based on strongly held religious beliefs that require the individual to refuse receipt of the insurance programs into which those taxes pay. The individual may receive an exemption from paying into Social Security, Medicare, and Unemployment Compensation because the individual will never receive those benefits, even in old age.
If you believe you should qualify for tax exemption, are unsure of your obligations in regard to an employee who may be exempt, or have other legal questions you want to be answered, call our office (717) 775-7195 to ask about a consultation with a Scaringi Law attorney.
Exemptions Are Not Automatic -- There's An Application Process
You are not exempt from self-employment tax merely by being a member of a particular religion or profession. There is an application process. The IRS requires you to file a form requesting the exemption, and that form includes a lengthy certification regarding your religious beliefs and their requirement that you do not accept various types of public insurance. You also must never have actually received any type of public insurance benefits, such as Social Security, or had anyone else receive those benefits based on your earnings record. After the application is submitted, the exemption must be approved by the Internal Revenue Service, who may determine you do not qualify and disapprove of your application.
Exemption Does Not Apply to All Earnings
Once obtained, the exemption only applies to earnings after the IRS approved the exemptions. Even then, it only applies to the extent that the exempt person is self-employed, engaged in a partnership exclusively with others who also have the exemption, or is employed by someone who also has the exemption. If an Amish person becomes an employee of an employer who does not have the exemption, the employer must withhold and remit FICA and FUTA taxes for the Amish employee the same as for all other employees.
FAQs
The shorter answer is Yes they do! Amish communities pay income, sales, public school, and property taxes.
Do Amish get money from the government? ›
The Amish communities strive to maintain independence from the government and they believe that accepting financial help from them compromises their independence. So yes, the Amish do receive stimulus checks and they qualify for one, but they're reluctant to accept help from the government.
Do the Amish have social security numbers? ›
One consequence of observing these and other core beliefs is that the Amish refrain from accepting Social Security and Medicare benefits, and in some cases from even obtaining a Social Security number, at least until later in life.
How do the Amish afford to live? ›
Amish communities emphasize living within one's means and generally avoid borrowing money. It is common for Amish families to pay for their homes outright using savings. They are more likely to save over a period and pay cash for materials and any skilled labor they might need from within their community.
Can Amish get welfare? ›
They Avoid Government Handouts
The idea of receiving food stamps, a welfare check, or government handouts is something the Amish frown upon. Part of this philosophy can be tied to their self-sufficiency and strong community which believes in helping each other when someone is having a rough spell financially.
What do Amish do for income? ›
Earning renown as skilled entrepreneurs, the Amish generate income from a diverse array of businesses, ranging from carpentry and construction to retail shops and restaurants. While the Amish are most well-known for farming, community members also provide a variety of services including lodgings and furniture-making.
How rich is the average Amish? ›
The Amish typically avoid discussing financial matters and wealth. They have an alternative money system, a hybrid model of dollars, real property and commodities. The median annual household income for Amish families is $42,000.
Are most Amish millionaires? ›
By modern worldly standards most are not 'rich' at all. Some may build big houses but that's because they have big families to feed and clothe. They may own a lot of land but they are also in big debt. Real Amish live modestly and spend modestly.
Can Amish drink alcohol? ›
The Amish people generally do not drink alcohol, including beer and hard liquor, as they view it as a worldly temptation that can lead to drunkenness and other harmful behavior. However, there may be variations in beliefs and practices between different communities and families.
Do the Amish use birth control? ›
All types of birth control, and also all forms of natural family planning such as calendar-based methods, are forbidden in Old-Order Amish communities.
If you are sincerely interested in talking to the Amish to learn more about their culture, then your best bet is to patronize an Amish-owned business and talk with the shopkeepers. Most Amish people enjoy talking with outsiders, if they don't feel like they are regarded as animals in the zoo.
Do Amish go to the bank? ›
Negotiating for such a huge purchase necessitates dealing with a banker. In these cases, the Amish turn to local banks for assistance.
Do the Amish pay their bills? ›
Yes. They pay income, property, sales, estate, and corporate taxes, and in fact many of them pay school taxes twice -- for both public and private Amish schools.
Do Amish use credit cards? ›
Contrary to what some might think, the Amish don't do a lot of old-fashioned bartering and trading. They use dollars when buying things from one another, and from non-Amish sources alike. Amish have checking accounts and some even use credit cards.
Do the Amish celebrate Christmas? ›
Let's start off with the obvious one. Do the Amish celebrate Christmas? Yes, they do. They celebrate it as a sacred holiday with simplicity and tradition.
Do hutterites pay taxes in Canada? ›
Hutterites are the ONLY Canadians taxed under the provisions of section 143 of the Income Tax Act which were developed in the 1960s.
Are there Canadian Amish? ›
Yes, there are Amish communities in Canada as well as several other related sects of old order Mennonites. The most well know population is in southwest Ontario in the farming areas around Kitchener-Waterloo and London.
Do Amish have tax ID numbers? ›
There are a few small groups that do not, mainly because of ignorance or living so far off the grid they avoid all documentation. As a whole, the largest Amish sects have both birth certificates and social security numbers. Generally yes. I've worked with several on tax matters and everyone had an SSN.
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