204:, and utilities. Clergy may legitimately include housing costs such as cost of buying or renting a home, real estate taxes, mortgage interest, condo or co-op fees, homeowners association dues, heat, electricity, basic telephone service, water, sewage, furniture, appliances, dishes, cookware, rugs, pictures, curtains, bedspreads, sheets, towels, insurance on the home and its contents, home improvements, home repairs and maintenance, home cleaning, snow removal, and lawn mowing.
285:
ruled on the law exempting clergy housing allowances from income tax, saying that its effect was to "neither to endorse nor to inhibit religion". The Court of
Appeals affirmed that Congress has the power to provide federal tax exemptions for religious organizations and that Congress has done so since
60:
In order to qualify, the clergy must be duly ordained, commissioned, or licensed by a religious body constituting a church or church denomination or synagogue, and the clergy must be given the authority to conduct religious worship according to the prescribed tenets and practices of that religious
286:
at least 1802. The Court of
Appeals stated that while any sort of financial interaction between a religious entity and the government may be considered a degree of entanglement, but the Establishment Clause of the United States Constitution is violated only with excessive entanglement.
187:
In the case of a widow of a deceased minister or rabbi, the tax-exclusion applies only if the housing allowance is designated with respect to a retirement plan representing compensation earned by the widow for the widow's past services that were in the exercise of ministry.
772:
133:
In order to qualify, the service must be performed for a church or synagogue or an integral agency of a religious organization. An integral agency of a religious organization is generally one where several of the following apply.
264:, "Congress shall make no law respecting an establishment of religion", because the law "does not have a secular purpose or effect and because a reasonable observer would view the statute as an endorsement of religion".
215:
After year-end, the church or religious organization must provide a written notice indicating the total amount of clergy housing allowance for the year; using box 14 of a Form W-2 is an example of such a written notice.
91:
the administration, maintenance, direction, management, or promotion of religious organizations and their integral agencies under the authority of a religious body constituting a church or church denomination or
164:
Services performed as an employee of the United States, the
District of Columbia, a foreign government, or any of their political subdivisions, even if performing sacerdotal functions or conducting religious
51:
In the United States, the rental value of a home furnished to, or the rental allowance paid to, a minister of the gospel or rabbi is not included in his or her taxable income if certain conditions are met.
184:, may designate a portion of the compensation as a clergy housing allowance, and this amount is excluded from taxable income to the extent it is used for expenses directly related to providing a home.
267:
The ruling only affects tax-free compensation paid to clergy, which the clergy uses to pay for the clergy's own home. The ruling does not affect housing actually owned by, or leased by, a church.
177:
Retired clergy are also eligible to claim the exclusion for the housing allowance because the
Internal Revenue Service deems clergy housing allowance as compensation for past services as clergy.
257:
of the plaintiff and not to the merits of the case, the same case, with minor revision, was reinstituted by the
Freedom From Religion Foundation in the same federal district court in 2017.
315:
180:
The tax-exclusion for clergy housing allowance also applies to retired clergy. A retired minister or rabbi who receives compensation for past services, such as withdrawals from an
207:
The minister's or rabbi's total compensation, including salary, fringe benefits, and clergy housing allowing, cannot exceed reasonable compensation for the services performed.
250:
to the
Seventh Circuit Court of Appeals. The Court reversed the decision, ruling that the plaintiff did not have standing; therefore the tax-free status remained unchanged.
731:
755:
712:
674:
639:
282:
260:
On
October 6, 2017, the federal judge struck down the clergy housing allowance, ruling that the law is an unconstitutional violation of the First Amendment's
688:
656:
240:
583:
789:
399:. Legal Information Institute. Cornell University Law School. August 16, 1954. Amended on May 20, 2002. Accessed on March 29, 2016.
122:
817:
126:
822:
235:, the Federal District Court of the Western District of Wisconsin issued a decision holding that the allowance violated the
244:
369:
147:
The integral agency has trustees or directors that are approved by, and may be removed by, the church or synagogue;
118:
750:
464:
156:
The integral agency in the event of its dissolution, would turn over its assets to the church or synagogue.
812:
150:
The integral agency is required to report its finances and general operations to the church or synagogue;
827:
447:
Publication 517: Social
Security and Other Information for Members of the Clergy and Religious Workers
278:
for 180 days pending resolution of any appeals, so the effect of the decision was not yet in effect.
578:
144:
The integral agency is continuously controlled, managed, and maintained by a church or synagogue;
36:
219:
Clergy housing allowance is not generally subject to income tax, but it is generally subject to
261:
236:
141:
The integral agency has an incorporated name indicating a church or synagogue relationship;
634:
220:
8:
509:. Legal Information Institute. Cornell University Law School. Retrieved October 25, 2017.
492:. Legal Information Institute. Cornell University Law School. Retrieved October 25, 2017.
275:
672:"Gaylor, Barker, Gaylor, and Freedom from Religion Foundation v. Mnuchin and Koskinen".
196:
The home must actually be used as a home by the clergy. The allowance cannot exceed the
502:
736:
693:
197:
96:
32:
751:
Gaylor, Barker, Gaylor, and
Freedom from Religion Foundation v. Mnuchin and Koskinen
708:
Gaylor, Barker, Gaylor, and
Freedom from Religion Foundation v. Mnuchin and Koskinen
503:
Treasury Regulation Section 1.1402(c)-5: Ministers and members of religious orders
485:
707:
598:
Understanding the Parsonage Allowance Part 2: Calculating the Parsonage Allowance
392:
316:"Ministers' Compensation & Housing Allowance | Internal Revenue Service"
109:
duties of clergy performed as an employee of the United States (other than as a
254:
806:
231:
In November 2013, the clergy housing allowance faced judicial opposition. In
69:
617:
446:
418:
295:
247:
201:
64:
The allowance must be for the minister's or rabbi's services performed:
271:
114:
618:
Publication 1828: Tax Guide for Churches & Religious Organizations
597:
657:
Why a former minister is challenging churches' tax privileges in US
110:
103:
732:
Tax Free Housing Benefits For Clergy Will Be Safe For The Present
76:
536:
Revenue Ruling 63-156, 1963-2 C.B. 79. Internal Revenue Service.
342:
153:
The integral agency is supported by the church or synagogue; and
790:
Clergy housing allowance is constitutional, appeals court rules
486:
Treasury Regulation Section 1.107-1: Rental value of parsonages
181:
138:
The integral agency is incorporated by the church or synagogue;
563:
Internal Revenue Service Private Letter Ruling 8404101 (1984).
85:
in the exercise of duties as required by the religious order;
40:
370:"Here's why rabbis can keep their housing expenses tax free"
55:
270:
On December 13, 2017, the federal judge ordered that any
689:
Clergy Housing Tax Break Ruled Unconstitutional - Again
168:
Services performed as an employee of a public hospital.
756:
United States Court of Appeals for the Seventh Circuit
713:
United States Court of Appeals for the Seventh Circuit
675:
United States Court of Appeals for the Seventh Circuit
640:
United States Court of Appeals for the Seventh Circuit
283:
United States Court of Appeals for the Seventh Circuit
226:
773:
Federal appeals court OKs tax-free housing for clergy
419:
Publication 15-A: Employer's Supplemental Tax Guide
95:in the exercise of the minister's profession as a
804:
584:Evangelical Council for Financial Accountability
465:"US rabbis' housing expenses to remain tax free"
602:Joint Retirement Board for Conservative Judaism
651:
649:
726:
724:
722:
635:Freedom from Religion Foundation, Inc. v. Lew
233:Freedom From Religion Foundation, Inc. v. Lew
393:U.S. Code § 107 - Rental value of parsonages
646:
191:
719:
554:Internal Revenue Service Rev. Rul. 72-249.
545:Internal Revenue Service Rev. Rul. 63-156.
210:
767:
765:
612:
610:
495:
56:Qualifying clergy and services performed
573:
571:
569:
480:
478:
364:
362:
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160:The following services do not qualify:
16:Unataxable income for clergy in America
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102:teaching and administrative duties at
762:
681:
607:
223:unless the person is retired clergy.
788:Banks, Adelle M. (March 19, 2019). "
566:
475:
353:
88:writing religious books or articles;
428:
402:
376:
326:
227:Legal challenges to tax-free status
13:
253:Because the reversal pertained to
182:employer-sponsored retirement plan
14:
839:
643:. No. 14–1152. November 13, 2014.
462:
172:
43:in Canada and the United States.
771:Bauer, Scott (March 15, 2019). "
596:Smilowitz, Mitchell J. (2023). "
579:The Minister’s Housing Allowance
82:in the exercise of the ministry;
46:
782:
743:
700:
666:
627:
590:
557:
548:
539:
530:
521:
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587:. Retrieved December 24, 2017.
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308:
1:
818:Taxation in the United States
661:The Christian Science Monitor
518:Rev. Rul. 62-171, 1962-2 C.B.
301:
823:Housing in the United States
7:
289:
10:
844:
200:of the home, furnishings,
622:Internal Revenue Service
507:Internal Revenue Service
490:Internal Revenue Service
451:Internal Revenue Service
423:Internal Revenue Service
397:Internal Revenue Service
192:Qualifying housing costs
113:in the Armed Forces), a
21:clergy housing allowance
281:On March 15, 2019, the
99:practitioner or reader;
211:Reporting and taxation
104:theological seminaries
794:Religion News Service
469:www.timesofisrael.com
123:political subdivision
759:. December 13, 2017.
740:. December 23, 2017.
347:Reform Pension Board
262:establishment clause
237:Establishment Clause
127:District of Columbia
70:sacerdotal functions
23:(sometimes called a
777:The Washington Post
663:. October 20, 2017.
221:self-employment tax
25:parsonage allowance
813:Taxation in Canada
730:Reilly, Peter J. "
716:. October 6, 2017.
697:. October 7, 2017.
687:Reilly, Peter J. "
655:Bruinius, Harry. "
245:Justice Department
828:Housing in Canada
527:Rev. Rul. 72-606.
198:fair rental value
97:Christian Science
77:religious worship
35:paid to ordained
835:
797:
786:
780:
769:
760:
747:
741:
728:
717:
704:
698:
685:
679:
678:. April 6, 2016.
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29:rental allowance
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243:. However, the
241:First Amendment
229:
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463:Oster, Marcy.
455:
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306:
305:
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300:
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298:
291:
288:
228:
225:
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173:Retired clergy
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151:
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145:
142:
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131:
130:
107:
100:
93:
89:
86:
83:
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61:organization.
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202:appurtenances
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47:United States
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296:Clergy house
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343:"Parsonage"
320:www.irs.gov
75:conducting
807:Categories
302:References
274:should be
272:injunction
119:possession
92:synagogue;
125:, or the
37:ministers
33:allowance
290:See also
255:standing
248:appealed
165:worship.
111:chaplain
31:) is an
624:. 2015.
453:. 2015.
425:. 2016.
239:of the
737:Forbes
694:Forbes
276:stayed
41:rabbis
115:state
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