CLARIFICATION OF RULES GOVERNING TAXATION UNDER FICA AND SECA OF INDIVIDUALS OF CERTAIN RELIGIOUS FAITHS.

SEC. 10204. CLARIFICATION OF RULES GOVERNING TAXATION UNDER FICA AND SECA OF INDIVIDUALS OF CERTAIN RELIGIOUS FAITHS. (a) Exemption from SECA Taxation for Certain Employees Exempt from FICA Taxation.— (1) In general.— Paragraph (3) of section 1402(g) of the Internal Revenue Code of 1986 (relating to inapplicability of exemption to certain church employees) is amended— (A) in the heading, by striking “not to apply” and inserting “to apply”; and (B) by striking “shall not” and inserting “shall”. (2) Effective date.—The amendments made by paragraph (1) shall apply with respect to taxable years beginning after December 31, 1989. (b) Technical Amendment Clarifying Inclusion of Partnerships Among Employers Eligible for Religious Exemption from FICA.— (1) In general.— Section 3127 of the Internal Revenue Code of 1986 (relating to exemption for employers and their employees where both are members of religious faiths opposed to participation in Social Security Act programs) is amended— (A) in subsection (a)(1), by inserting “(or, if the employer is a partnership, each partner therein)” after “an employer”; (B) in subsection (a), in the matter following paragraph (2), by striking “his employees” and inserting “the employees thereof”; (C) in subsection (b), by inserting “(or a partner)” after “an employer”; (D) in subsection (c), by striking “his employees” and inserting “the employees thereof”; (E) in subsection (c)(1), by inserting “(or, if the employer is a partnership, each partner therein)” after “such employer”; and (F) in subsection (c)(2), by striking “such employer or the employee involved ceases to meet” and inserting “such employer (or, if the employer is a partnership, any partner therein) or the employee involved does not meet”, and by inserting “(or, if the employer is a partnership, any partner therein)” after “such employer” the second place it appears. (2) Effective date.—The amendments made by this subsection shall be effective as if they were included in the amendments made by section 8007(a)(1) of the Technical and Miscellaneous Revenue Act of 1988 (102 Stat. 3781).