Do Amish pay taxes? Do Mennonites pay taxes? We'll look at the facts for if Amish pay income tax, property taxes, social security taxes, sales taxes, etc.
The tax deadline is upon us, and I wanted to take this opportunity to shed some light on a very controversial topic to attempt to answer the question: do Amish pay taxes?
There are several reasons why this topic is so controversial, and two that I would like to address.
Taxes are charged by many levels of governments in order to carry out many different functions. Some of these functions include maintaining and building roads, public transportation, public works, enforcement of law, protection of property, welfare, education, etc.
Whether or not you agree with these functions is another topic all together. However, several of these government functions benefit everyone — Amish included — even though the Amish may not actually contribute to these benefits financially.
The most obvious example is the building and maintaining of roads.
Do Amish people pay taxes for roads? The cost of this is paid for mainly through gas taxes, revenue from driver’s licenses, and money collected through tolls. While the Amish do not pay these consumption taxes, they do use roads and bridges to drive their horse and buggies on.
The second reason why this topic is so controversial? Because of the lack of information that's led to the assumption that the Amish do not pay any taxes at all.
That is simply not true.
There are taxes that are not paid by the Amish, but in each of these cases, it's because:
- they don't consume the service or product involved and so do not pay the excise/consumption tax
- they don't take advantage of the government benefit taxes are paid into due to religious reasons, and therefore do not contribute towards its upkeep
Note: In order to receive any of the tax exemptions I am about to discuss below, an Amish person must formally join the Old Order Amish church. Amish join the church when they feel ready to do so, and in most cases this is in the late teen years. Once joining the church there is a form to be filled out that will make them eligible for certain tax exemptions.
Do Amish Pay Taxes? Yes. But Not All of Them
Part of the Amish money life is to pay income taxes, just like the rest of us Englishmen (that’s what they call Americans who are not Amish), and they also take any qualifying Child Tax Credits worth up to $1,000 per child.
But let’s face it: most Amish families have upwards of 8+ children (how else can they run those large farms and family businesses?).
The Amish pay income tax, just like the rest of us Englishmen. Click To Tweet
I remember one of our neighbors while I was growing up who had twelve children. When I naively implied that her family was huge, she blushed and said that she has had one new child every two years like clockwork since the beginning of her marriage. This definitely cuts down on their tax bill.
Since the Amish own a lot of land, they also pay property and school taxes.
In Pennsylvania, school tax is one form of property tax.
“First and foremost, property taxes fall under the jurisdiction of your local governments, specifically your county, municipality and school district. Property taxes continue to be a primary source of funding for these governments, as this tax is the only tax authorized by law to be levied by all three, where every property owner pays tax to each, unless otherwise exempted.”
However, under the The Taxpayer Relief Act, they can apply and receive a Farmstead Exclusion that reduces (not eliminates) the amount of school and property taxes owed. There’s also the Homestead Exclusion, which can help reduce taxes for the home on a farm. Here’s an article I found that explains these exclusions much better than I can
Even though land-owning Amish pay school property taxes, they do not benefit from them because they have their own one-room schoolhouses where children are taught by devout, single Amish women until the 8th grade (that is not government-funded).
They also own rather beautiful, typically large homes due to large families — so they're likely paying a pretty penny on property taxes.
Finally, the Amish are liable for estate taxes as well.
Do Mennonites Pay Taxes?
Yes, Mennonites pay taxes, just like Amish pay taxes.
However, just like the Amish, the Mennonites are a qualifying religious group who can meet the religious Social Security tax exemption.
Mennonite and Amish Social Security Exemption
The Amish do not collect unemployment, social security, or welfare benefits because doing so would be against their religious beliefs.
As such, they have been exempt from paying into these systems.
This is rooted in their religious belief to insure their kind (specifically the following Bible verse has been cited by the Amish to explain this:
I Timothy 5:8 says “But if any provide not for his own, and especially for those of his own house, he hath denied the faith and is worse than an infidel.”).
In order to receive the exemption, they must waive all rights to receiving Social Security benefits in retirement, they must be self-employed, and they must be a member of a recognized religious sect.
They also must file the Social Security Tax Exemption Form 4029 – Application for Exemption from Social Security and Medicare Taxes and Waiver of Benefits with the IRS.
Note: if they are not self-employed, and their employer has not filed that same form, then their wages are still subject to Social Security taxes.
They also believe that insurance is an outward sign of a lack of faith in God.
Instead of insurance, they collectively help one another pay medical bills, rebuild homes and farms, etc. When someone has a huge bill that they cannot cover, they stand up in their weekly church ceremony and tell everyone about it. No one leaves until enough money has been raised to cover this expense. In a sense this is insurance, but it is among themselves and does not involve an outside body. The Amish even have an exemption in the new Healthcare law—which mandates that everyone carry health insurance—for these same religious reasons.
Social Security is a form of insurance for old age and survivors, so they do not collect it, nor do they pay into it. This exemption was written into the 1965 Medicare Bill after a very interesting series of events you may wish to read about.
Psst: do Amish have social security numbers? Yes, they do still have social security numbers.
Do Amish File Tax Returns?
Yes. Amish file tax returns — just like the rest of us.
Consumption Taxes Not Paid — Gas and the ‘Sin’ Taxes
Your lifestyle dictates the consumption taxes that you pay.
The same is true of the Amish, who have a much more restrictive lifestyle than most of us. Horse and buggies — the main mode of transportation for Amish — do not use gasoline.
As such, the Amish do not pay gasoline taxes. The federal excise tax on fuel is 18.4 cents per gallon and 24.4 cents per gallon for diesel fuel. State fuel taxes vary, but average 48.1 cents per gallon and diesel fuel taxes average 53.1 cents per gallon (this includes the federal fuel tax). Federal proceeds go into the United States Highway Trust Fund. State proceeds typically go towards roads and other transportation projects.
Even though the Amish do not contribute towards these funds, their horseshoe-clad horses have been known to do some damage to the roads.
It is interesting to note that certain counties in Indiana and Ohio, where there are a large and growing Amish population, require Amish buggies to get license plates.
A trek through Amish country in Lancaster PA will show the periodic barn with wooden slats opened to the air. These are tobacco barns that have been modified in order to air-cure tobacco leaves.
While some Amish make money from selling tobacco, they do not purchase cigarettes because they are viewed as ‘worldly’ (that doesn’t mean they do not smoke cigars/pipes and use chewing tobacco, though smoking is forbidden in many Amish sects).
This means that they do not pay taxes on cigarettes, but may pay taxes on other tobacco products. States use tobacco tax revenue in various ways, such as to fund health education programs, early childhood development, breast cancer research, education, etc.Your lifestyle dictates the consumption taxes that you pay. Click To Tweet
Other ‘sin’ taxes not paid by the Amish are for alcohol or gambling winnings (this is probably not paid by most of us either!).
The Amish do not consume alcohol. As such, they do not pay the alcohol tax. Federal alcohol tax is currently 21 cents on a bottle of wine, 33 cents on a six-pack of beer and $2.14 on a fifth of hard liquor.
State alcohol taxes rates, which vary, generally go into a state’s general fund.
And finding an Amish person in a casino would be like finding my grandmother in couture — it’s not going to happen.
Do Amish pay taxes? I think you can see from above that the answer is yes. They pay some taxes, while others they are exempt from either because of consumption habits, or due to their Social Security Exemption — which they get because they do not receive Social Security benefits when they retire.
Additional Amish Money Resources
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