The government’s main purpose of tax imposition is to finance public welfare and meet national expenses.
Whether it’s your healthcare, social security, defense, primary education, etc., everything has to be paid by the government, and that’s why taxes are collected from all members of the community.
However, certain groups of societies are exempt from certain taxes. Besides, all individuals can claim tax exemptions based on their specific circumstances as the IRS allows.
However, a big controversy in different states of the US is the taxation policy for the Amish. Many people argue that the Amish do not pay taxes.
But what is the reality?
Do the Amish pay taxes? If they pay taxes, why are there controversies about them? If they don’t pay the taxes, what are the reasons behind it?
These are a few questions that everyone might think. That’s why we are going to answer all these questions in this article. We will talk about the Amish, taxation policy, exemptions, and compulsions.
So let’s get into it.
Who Are Amish?
Amish refer to the traditionally old order Amish representing the group of conventional Anabaptist Christian church fellowships having Alsatian and Swiss German origins. Amish are often compared with Mennonites, and both groups are actually very similar.
If we talk about the living style of the Amish, they often have a simple lifestyle with plain clothes, Christian pacifism, and resistance(slow adaption) to modern technology.
Besides, this group of people has values like face-to-face communication is irreplaceable, convenient rural life, and practicing humility is the best.
However, many myths about the Amish have been spread, and it’s necessary to decode them. The most popular myths you will come across about the Amish people are that they believe technology is evil, rely on barter, and churn their own butter.
And the weirdest myths include things like Amish men marry their sisters, have two wives, only eat organic food, and will paint their gate blue if they have a daughter of marrying age.
A Little History Of Amish
What about the origin and history of the Amish people?
Let’s dig a bit into it.
The Anabaptist movement was initiated by Huldrych Zwingli, who was also popular for early Reformation in Switzerland.
The term Amish was introduced in 1710 as humiliation or disgrace, and it was then called Schandename. The term was used by opponents of Jakob Amman, an Anabtaptist leader.
After growing up in Switzerland, the Amish started moving to Pennsylvania due to favorable conditions like land offers and no or low religious persecution.
It was the best place for them to settle down and practice their values.
Later on, the Amish communities started losing the real identity that they carried from North America.
It led to the division of Old Orders and Amish Mennonites in the third quarter of the 19th century. Fast forward to the 20th century, the Old Order Amish were further split among Swartzentruber Amish and the Buchanan Amish.
Do Amish Pay Taxes?
To our main question: do the Amish pay taxes?
As mentioned earlier, one of the biggest myths about the Amish is that they do not pay taxes like other communities and individuals in the US.
So what is the answer?
The short answer is Yes!
The Amish pay taxes, be it income taxes, property taxes, or sales taxes. So why is there a general perception that the Amish people do not pay any taxes?
Well, it’s because the Amish waive off the Social Security services the government provides, and therefore, they don’t contribute to the Social Security programs.
What Taxes Are Paid By Amish?
Let’s talk about taxes the Amish paid and if there is any difference in tax rates, limits, etc., for the Amish people as generally believed.
Here is the list of all the taxes that are rightfully paid by the Amish communities in different parts of the US.
Federal & State Income Taxes
Unlike popular belief, wherever the Amish community people are living, they pay the income taxes according to Federal and State requirements without any exemption or extraordinary conditions.
There are also a lot of businesses run by Amish men, and they have to do taxes as per the rules of the State and the Federation.
Therefore, you must know that the Amish people will be paying even a big sum of money into taxes if it applies.
Property and land taxes vary across different States of the US. Therefore, the Amish people pay land and property taxes wherever applied.
According to a statement of an Amish person, his father has owed a lot to the government in land taxes as Pennsylvania has the highest property taxes.
So it won’t be appropriate if we say that the Amish do not pay any property or land taxes.
Wherever applicable, you will see the community members paying whatever sales taxes are applied to them.
Whether well-off or not, the Amish people live as other individuals in society and responsibly fulfill all duties expected from a citizen.
Well, yes, if the Amish people own a property in any location, they pay the school taxes like any other citizen of the US.
Whether they are sending their kids to a public or private school, school taxes are applicable and collected from all respective taxpayers, Amish or not.
We have listed the taxes residents in the US must pay to the government for running the economy. We should stop believing that the Amish people are exempt from taxes and they live at the expense of other individuals in the US.
Exemptions For Amish
Although the Amish people do not have any specific exemptions or privileges for not paying taxes, there are certain exemptions they have entitled themselves to.
It’s not any kind of privilege or discriminatory act but a contradiction with the belief of the Amish. We will discuss in the coming section why they claim exemptions.
So what taxes are the Amish exempt from?
The Amish people residing in different states of the US are exempt from the following taxes:
- FICA –Federal Insurance Contribution Act
- FUTA –Federal Unemployment Tax Act
- Self-Employment Tax
FICA is payroll tax deducted by the employer from an employee’s paycheck to fund the Social Security and Medicare programs.
The employer makes an equal contribution to FICA, and it is directly paid to the Federal government by him.
FUTA or Federal Unemployment Tax Act is put in place to provide unemployment compensation to the labor force who have lost their jobs.
The employers often pay FUTA, and no amount is deducted from the employee’s paycheck.
Self Employment Tax is also like FICA, which funds the Social Security and Medicare program but is for self-employed people.
In the case of self-employed people, the employer has no contribution as there is no employer.
Why Don’t Amish Pay Certain Taxes?
Now many people object that why don’t the Amish pay certain taxes?
Well, it’s because of the religious beliefs of the Amish that abstain them from receiving Social Security benefits and Medicare benefits.
Therefore, they don’t pay FICA or Self-employment taxes to Federal and State governments. They claim the exemption because these communities take care of themselves on their own.
They support this thought with the following reference:
I. Timothy 5:8:
“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.”
They believe these programs are insurance programs and don’t believe in participating in commercial insurance.
The Amish communities believe that if they become part of such practices, they consider it a lack of faith in God. However, the Amish business owners have to pay the FICA and FUTA for the non-Amish workers.
How To Claim Exemption?
Tax exemptions for the Amish communities are not automatic. The people of the Amish community must go through the application process to request the exemptions.
You have to fill out the form and file it with the IRS by disclosing your religious beliefs, not accepting public insurance, etc.
We have discussed everything regarding taxation regulations and policies for the Amish communities.
However, you must know that not all earnings of the Amish communities are exempt from taxation. For instance, the Amish people are bound to contribute to FUTA and FICA as an employer.