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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?).
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 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 that 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 ensure 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. The 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. Horses 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 is 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.
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 tax 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
Amish Finances + How They Save Money
Amish Teenage Life — How their Parents Manage Their Paychecks
Amanda L. Grossman is a writer and Certified Financial Education Instructor (CFEI®), Plutus Foundation Grant Recipient, and founder of Frugal Confessions. Over the last 17 years, her money work has helped people with how to save money and how to manage money.
She's been featured in the Wall Street Journal, Kiplinger, Washington Post, U.S. News & World Report, Business Insider, LifeHacker, Real Simple Magazine, Woman's World, Woman's Day, ABC 13 Houston, Keybank, and more. Read more here or on LinkedIn.
Exempt from Social Security! Sign me up. Where can I apply to be Amish? j/k
Fascinating read Amanda. I've actually delivered goods and equipment to Amish farms quite a bit over the year. I've talked to some of them about this very subject.
One thing that gets me though... If Pastors and Amish can be exempt from Social Insecurity for religious beliefs, why can't a regular Christian like myself get the same exemption. My beliefs are exactly the same.
I did not know about the Amish insurance belief. That is incredible!
Oh.. and I tweeted this out. Thanks for adding that button. Very user friendly now!
I would think they draw enough tourists to even out the taxes they don't pay like us. Good enough for me!
What do you think that means?
Plenty of businesses serve and attract tourists. Those businesses still have to pay taxes. The result of being a successful business is the profit. And profits are taxed.
Fascinating article Amanda. I confess I had never wondered if the Amish paid taxes until I saw your title. Very informative.
Thank you Thad! I am glad you found it interesting; even though I grew up with Amish all around me, I still find them fascinating and want to learn more.
I now have for two months have supposed amish living next door to me.They have a skid steer,4 wheeler,chain saw's etc. not the amish that I have seen all around this great country.Each to his own but if they hate us like muslims they should buy a ticket on a boat and go back to the home land.Tax evading is all they are!!!
This is the most ignorant comment I can imagine. Who ever said Amish hate you, the US, or "Englishmen"? No one. They've been here at least since the civil war, so have no 'home'. Did you not read the article? they don't evade any taxes, the laws were written to exclude them from services they don't use.
You are absolutely right, Self-employed Amish do not pay Social Security tax. Those employed by non- Amish employers do pay Social Security tax. The Amish do pay real estate, state and federal income taxes, county taxes, sales tax.
Very interesting!! I didn't think the buggy would damage the road because they are so much lighter than cars, but I guess I was wrong. We've never been to Amish country, but I would love to drop by sometime.
It's not just the horseshoes, it is the steel wheels that over time damage the roads. In rural West-Central PA, there are places with grooves from these wheels running down country roads for miles. Doesn't seem like a big deal until you hydroplane on the wet roads because of the surface damage.
I really enjoyed this article. I find the Amish fascinating and often wonder what Amish life would really feel like.
It is very interesting how the Amish handle their finances within their own little system. I especially found how they handle their medical care costs interesting.
Thank you for sharing!
It seems fair that if the services are not used, taxes should not be paid. The Amish pay property tax as you said. I think license plates for horse and buggies using the roads is a fair solution as well. If you don't consume alcohol or tobacco products, you shouldn't pay the tax anyway so that makes sense.
It seems like the Amish have a good answer to insurance. They are self-insured and have their own co-op. It would be an interesting experiment to try with Englishmen and take out the insurance company middlemen.
Fun fact:
The Amish are heavily involved in building and home improvement businesses. They get around the religious restrictions by partnering with an "Englishman" who drives the truck, pays for the permits, and buys the materials.
We took a few quotes from various Amish companies when we were replacing our roof last summer. They were all on the high side, too.
This was a great article. I read it from beginning to end. My only interaction with the Amish was a trip to Amish country in PA. I thought that the land was beautiful and the people interesting in their mode of dress and speech.
Thank you! I am so glad you are interested in the topic.
It seems fair that the Amish don't pay taxes on products they don't use. However, they are a part of this nation.. so my feelings are mixed.
Hello, I am former Amish, and I have to say, since the Amish pay both for public schools and their own private schools, they are in fact double taxed for that. They should have a way to write off the expenses for their own schools on their property taxes.
Interesting article! The number of Amish people is incidental compared to all the rich people who do not pay their fair share of taxes.
Thank you for reading, and for your perspective!
"Do not pay their fair share"?
What would be fair? Can you give us a number that they should pay?
If there was a flat tax, and everyone paid that set percentage, only then would the word "fair" be applicable.
If someone is expected to pay a higher percentage than you, where is the fairness in that?
Be gone, troll.
Amish tax or no Amish tax is not the question. The bigger question is G.E. did not pay taxes (or very little when they revised it because of articles in media) and other conglomerates for the year 2010.
Congress of the United States (more like the Roman Senate - aloof, arrogant, deliberately trying to stay away from the issues facing the common man and woman, in the strong grips of the lobbyists with special interests) must close the loopholes that give big companies every drop in tax dollars. That not only subsidize their losses but let them keep their profits 100%.
Hello!
I have heard that GE made billions of dollars in profit last year and did not pay any taxes...that is insane. Thanks for your thoughts!
I would like to add, that the Amish do use petroleum products, and plenty of it (at least in Lancaster county). Their homes and farms are powered by diesel fuel, which is set up to use air lines for use with Amish milking systems, pressure hoses, and washing machines. Farmers have 1000 gallon tanks because of the amount of diesel needed for their operations. The Amish also use great amounts of propane - this is how they light their houses, and many of them heat their homes with propane. As far as gasoline, one cannot drive through Lancaster county without seeing many leaf blowers being used. The Amish take great pride (and it shows) in the appearance of thier property and are continually mowing, raking and blowing away leaves, brush, or anything that might interrupt the beautiful landscape of Lancaster county!
Hi Vickie!
Thank you for your insight and information. There is a diesel tax, so they are helping with the examples that you gave. I've only ever seen extremely well-kept Amish farms and homes as well. It'll be nice to visit next week!
my problem with the whole thing is as a business person they don't have to pay workmans comp, and the other things that contractors have to pay. but yet I do have to bid against the (amish) I go to church I don't smoke don't drink. As a business owner have to pay for my own insurance or medical bills out of pocket. they should be held to the same standards as myself.
That’s actually not true. The Amish might not pay workers comp for their Amish employees but most Amish businesses have non-Amish employees as well. I work with an Amish owned business that definitely pays works comp insurance. Also they have a church run nonprofit that they fund for there Amish employees. So you could be doing to same thing as they are. Hire Amish employees and you have the same opportunity.
The swearing & drinking they really do a lot of that. A miss understanding that they don't indulge in things. They have cell phones, bank cards , cars or vans are kept in the barn & is owned by them & taken care of by them but they have others outside the Amish to drive them around. Electric is in the barn & property just not in the home. Growing up in Pa. I saw many drunk driving Amish buggies horse & driver get killed. Their just people just like us, only a little different .I also remember Amish waiting for the school bus to bring kids home, that's when I learned about them selling Marijuana. Never saw them smoke but they did sell it.
Very interesting article--thank you! I love reading about the Amish because even though they reside alongside us in this country they live so very differently and thrive.