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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.
I feel once you are the English in the Amish community you see they pay their sin taxes just like us.. They just pay us to do it for them lol
I wish people where I lived understood the tax portion of your article.. It could lessen the English anger by feeling cheated.. In Missouri there is a lot of misunderstanding in our communities shared with Amish.. I have heard so many complain they don’t pay taxes..
Education....
@Linny, Missouri? If you live in Missouri, you're an American. Unless they have another Missouri in England.
Also, ANYBODY that calls an American an English men is insulting the American.
@Linny,
SIN taxes only? What abt the rest they sidestep, which is much much more?
Btw, watch the Amish twist & contort their own rules & supposed beliefs: cannot drive a vehicle, so hire another sect to cart then around in minivans. Disdain for the "english"? Yet, they r at our stores & wanna make a buck off us. Better craftsmen cuz they use "hand tools"? No, they just don't use gas powered. And no bigger group who is more cruel to animals, & constantly heads the list of puppymillers. Also fought against Goddard's Law.
It is interesting that the Hutterites, a religious sect very close like Amish and Mennonite, DO use all welfare programs - food stamps, Medicaid, etc. even without paying in, because theirs are communal farms ad they technically do not own those resources.
How can you people be so supportive of a group of people who are cruel to animals...did you not read the washington post and see the news on tv where the 20 yr old amish guy beat his horse to death...you people like this ?..,,time to boycott these people and quit buying anything amish...it horrifying to know people like this exist...quit trying to like these people for who they arent...they are cruel and i hope God get even with them...and soon !...Do Not Support These People....Boycott Them !
I hope you don't shop at Walmart and support the communist Chinese government.
Or purchase gas that was bought from any of the OPEC countries.
Or purchase your electricity from a utilities company that isn't owned by an American corporation.
Does one individual Amish that beats his horse to death make all Amish bad people? Michael Vick made headlines for his dog fighting ring. Does that make all dog owners bad people?
@Jon, so do you watch football? Any sports at that matter ? Movies vote ? How many sectors of the world have you supported that have been corrupt or have done something evil to others or animals ? I only can imagine a lot ! So stop making one person or a few represent the hole of a community.
Wonder if the Amish pay the taxes on the thousands of puppies they sell for several thousand $$ each in their nasty, vile, filthy puppy mills where no vet care is done and dogs are kept in cages not much bigger than they are for all of their lives. Bet they dont...but you guys just love them so keep that thought when you know that their dogs are horribly abused.
@K King, again don't condem the hole for a few. I have bought two akc labs from them raised in a beautiful barn and have been great dogs.
Coworkers & I this morning were wondering if Amish paid taxes, so thank you for your article. Next question is how is the ACA impacting the Amish? Are they exempt or are they being fined if their medical insurance isn't to a certain standard?
I read with interest your posts. The Amish fascinate me as well. Go to the New Holland Horse auction on Mondays, that's when they go and will always You can observe, these clean we be.ll dressed Amish men brokering with the slaughter buyer headed for Canada. Then they just get more at the auction, fast ones like Thoroughbreds, not meant for such work. They have credit cards, bank accounts, windmills to heat their homes. They pick and choose and we say nothing. Please read Maple Syrup disease of the Amish, can't say anything more after you read that
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Only one thing in this article I disagree with and that is they do not drink.I was surrounded by them in Ohio and on Saturday would be asked by them to buy liquor.Many times I would have 3 cases of liquor to deliver to them after my trip to town.Almost all have cell phones except the very strict sects.
If I payed taxes for what I used or my family used that would be the perfect world. Example I don't plan on having kids but I pay taxes for others to send their kids to school. Do the Amish enjoy the freedom that our military provides? Do they pay for that? Road usage per gas tax absurd.... They can take their horse and buggy and make their own roads on the unpaved shoulder.
As for the Amish do not drink..... Take a trip out yo Lancaster you will see plenty of Amish bellied up to a bar, however that should not exempt them from an alcohol tax. If they own a business they should have to pay workmans comp just like the rest of the working stiffs who own a business. Oh and when can I opt out as an American to not pay into SS, welfare and other usage taxes. Last time I checked as an American we pay for all regardless if we use it or not. No exemptions no accept ions. Addressing the land tax yes they pay it but it's not at the same rate as property tax the rest of Property owners pay, they get a substantial discount for calling it a farm. I can go on all night about separating church and state but hey who cares about my rant.
@Troy, you realize that as Americans we shouldn't be paying a lot of those taxes right? But we do because we don't want to go to jail.... They figured out a way to not pay those taxes and not go to jail.... They deserve props.
@Troy,
I care, cuz I agree. And it long past time we have user fees & not socialist operating taxes. Ya wanna partake in something? Pay for it. Wanna have kids? Pay for their own rearing & education. Same for everything else.
Moreover, as an atheist, I am doubly pissed cuz not only am I not eligible to employ tax CHOICE, I get crapped on cuz I don't believe in a big man in the sky-- any big man up there. Any flavor of religion. How is that not discriminatory?
I pay $500 every 2weeks to social security. I would like to have the option of saving or investing that myself especially since a large majority of Seniors are barely getting by on their SS checks! I do not and have not collected unemployment or any other government assistance but still have to pay taxes regardless.
I am an escrow officer and I have closed a number of transactions with the Amish in Montana. Every closing, it is a battle to get them to disclose their tax id number or give you identification. They do this because they do not want you to report capital gains to the IRS. Because so many of them have the same names, the lack of a picture ID is a huge problem. Over the last ten years I have heard many different Amish people give me lectures about why they don't have ID (photos steal the soul) or tax id numbers (they are not a number or part of the system) They also sell their crops and request cash so they don't have to deal with banks or report their income. Not all of them. I have closed a number of Amish people with tax id numbers and photo id's, but the majority that I have worked with have avoided giving me the information until I told them I would not close without it.
@tina,
Bingo! They also get away with underage child employment, often in construction. If my hubby did that, OSHA would be crawling all over the jobsite.
Hi, I think your blog might be having browser compatibility issues.
When I look at your blog site in Chrome, it looks fine but when opening in Internet Explorer, it has some overlapping.
I just wanted to give you a quick heads up! Other then that, very good blog!
Thank you so much for the heads up! I think the photo that I used in my last post has something to do with it...I will alert my tech.
BTW, be very careful of a government that is encouraging "class warfare". The majority of business owners in the us are still 99% middle income people who employ many. I have absoluty no issues with a biz man/family recieving tax benefits, as I look around my community I see an overwhelming amount of generosity from biz people. I would be very cautious of a government who has passed laws penalizing charitable giving.
I'm sure Amish do not participate in social security benefits and therefore they would not obtain ss numbers for their homeborn children. Which means they can not claim them on their taxes. In order to claim a child, the child needs a ss number.
Does really mater if Amish people pay tax, who cares, I think they draw enough tourists for the state or the county where they are,and what we should be looking out is for those Big corporation and rich people, who the government allow them to write off a Hamburger or a cup of coffee on their Income tax.