H.R. 227, Clergy Act

February 27, 2026

Cost Estimate

As reported by the House Committee on Ways and Means on January 7, 2026

At a Glance H.R. 227, Clergy Act As reported by the House Committee on Ways and Means on January 7, 2026
By Fiscal Year, Millions of Dollars		2026	2026-2031	2026-2036
Direct Spending (Outlays)		0	*	2
Revenues		0	29	84
Increase or Decrease (-) in the Deficit		0	-29	-82
Spending Subject to Appropriation (Outlays)		0	*	*
Increases net direct spending in any of the four consecutive 10-year periods beginning in 2037?	< $2.5 billion	Statutory pay-as-you-go procedures apply?		Yes
	< $2.5 billion	Mandate Effects
Increases on-budget deficits in any of the four consecutive 10-year periods beginning in 2037?	< $5 billion	Contains intergovernmental mandate?		Excluded from UMRA
	< $5 billion	Contains private-sector mandate?		Excluded from UMRA
* = between zero and $500,000.
The bill would Allow clergy to make a onetime decision to reverse a previous decision to exempt their ministerial earnings from self-employment taxes Result in additional revenue from self-employment taxes from clergy who exercised that option Increase outlays for future Social Security and Medicare benefits
Estimated budgetary effects would mainly stem from Additional payroll taxes paid by clergy Higher outlays for Social Security and Medicare benefits, almost all of which would occur after 2036

Bill Summary

H.R. 227 would allow clergy to make a onetime decision during calendar years 2029 or 2030 to reverse a previous decision to exempt their ministerial earnings from self-employment taxes.

Estimated Federal Cost

The estimated budgetary effects of H.R. 227 are shown in Table 1. The costs of the legislation fall within budget functions 570 (Medicare) and 650 (Social Security).

Table 1. Estimated Budgetary Effects of H.R. 227
	By Fiscal Year, Millions of Dollars
	2026	2027	2028	2029	2030	2031	2032	2033	2034	2035	2036	2026-2031	2026-2036
	Increases in Direct Spending
Estimated Budget Authority	0	0	0	0	*	*	*	*	*	*	2	*	2
Estimated Outlays	0	0	0	0	*	*	*	*	*	*	2	*	2
On-Budget Outlays	0	0	0	0	*	*	*	*	*	*	1	*	1
Off-Budget Outlays	0	0	0	0	*	*	*	*	*	*	1	*	1
	Increases in Revenues
Estimated Revenues	0	0	0	5	12	12	12	12	11	10	10	29	84
On-Budget Revenues	0	0	0	1	2	2	2	2	2	2	2	5	16
Off-Budget Revenues	0	0	0	4	10	10	10	9	9	8	8	24	68
	Net Decrease in the Deficit From Changes in Direct Spending and Revenues
Effect on the Deficit	0	0	0	-5	-12	-12	-12	-12	-11	-10	-8	-29	-82
On-Budget Deficit	0	0	0	-1	-2	-2	-2	-2	-2	-2	-1	-5	-15
Off-Budget Deficit	0	0	0	-4	-10	-10	-10	-9	-9	-8	-7	-24	-67
	Increases in Spending Subject to Appropriation
Estimated Authorization	0	*	*	*	*	*	*	*	*	*	*	*	*
Estimated Outlays	0	*	*	*	*	*	*	*	*	*	*	*	*
Sources: Congressional Budget Office; Staff of the Joint Committee on Taxation. Components may not sum to totals because of rounding; * = between zero and $500,000.

Basis of Estimate

Under current law, certain members of the clergy may make a onetime, irrevocable decision to exempt their ministerial earnings from self-employment taxes. If they elect to do so, they will not receive Social Security and Medicare benefits based on those earnings. H.R. 227 would allow clergy members to revoke that decision, thus subjecting their earnings to payroll taxes and allowing them to receive those benefits.

The Congressional Budget Act of 1974, as amended, stipulates that revenue estimates provided by the Joint Committee on Taxation (JCT) are the official estimates for all tax legislation considered by the Congress. CBO therefore incorporates such estimates into its cost estimates of the effects of legislation. The revenue estimates for H.R. 227 were provided by JCT.

Direct Spending and Revenues

Using information about the number of clergy members who elected coverage under a similar provision in the Ticket to Work and Work Incentives Improvement Act of 1999, CBO and the staff of the Joint Committee on Taxation estimate that roughly 3,000 clergy members would reverse their decision in 2029 or 2030. That change would result in an increase of $84 million in payroll tax revenue over the 2026-2036 period. Of that, $68 million is from additional Social Security payroll tax revenues, which are classified as off-budget, and $16 million is from additional Medicare payroll taxes, which are on-budget.

CBO estimates that outlays for Social Security and Medicare benefits would each increase by $1 million over the 2026-2036 period as a result of the reversed decisions. Most additional benefits that would result from those decisions would be paid after 2036. Social Security outlays are classified as off-budget, whereas Medicare outlays are on-budget.

Spending Subject to Appropriation

On the basis of costs of similar efforts, CBO estimates that implementing the legislation, including reporting to the Congress on efforts to inform clergy about their eligibility to elect coverage, would increase administrative costs for the Internal Revenue Service by less than $500,000. Such spending would be subject to the availability of appropriated funds.

Pay-As-You-Go Considerations

The Statutory Pay-As-You-Go Act of 2010 establishes budget-reporting and enforcement procedures for legislation affecting direct spending or revenues. Only on-budget changes to outlays or revenues are subject to pay-as-you-go procedures. The net changes in on-budget outlays and revenues that are subject to those pay-as-you-go procedures are shown in Table 1.

Increase in Long-Term Net Direct Spending and Deficits

Clergy members who elected to pay self-employment taxes on their ministerial earnings would be subject to additional taxes during their working years, but they would later receive additional Social Security benefits and, in some cases, additional Medicare benefits. As a result, the bill would increase revenues (and thus reduce federal deficits) in the near term and increase outlays (and thus increase deficits) in later decades.

CBO estimates that enacting H.R. 227 would not increase net direct spending by more than $2.5 billion in any of the four consecutive 10-year periods beginning in 2037.

CBO estimates that enacting H.R. 227 would not increase on‑budget deficits by more than $5 billion in any of the four consecutive 10-year periods beginning in 2037.