The following is an announcement that was e-mailed last week to all U.S. Christian Reformed church ministers. We are sharing it here on The Network.
Judge Declares Clergy Housing Exclusion Unconstitutional
- The court’s decision applies only to ministers who receive a cash housing allowance from their employers to provide housing. Ministers who live in employer-provided housing (ex. church-owned parsonages) are not affected.
- Even ministers who receive a cash housing allowance will not be immediately impacted by the ruling. The district court’s decision on the clergy housing exclusion may be appealed by the government’s attorneys to the Seventh Circuit where it could be overturned. Since the case was filed attorneys for the federal government have defended the constitutionality of the clergy housing exclusion and have argued that FFRF lacked legal standing to bring the challenge in the first place.
- For the most part, pastors across the country are compensated modestly for very demanding work. The history of the clergy housing allowance provided parity to pastors who did not live in church-owned parsonages.
- Many members of the clergy have relied on this exclusion for decades. This ruling in effect would force clergy of nearly every religion across America to pay additional taxes, regardless of faith or creed.
- This will either force congregations to increase clergy compensation to offset these taxes or require pastors to dig deep to see if they are able to absorb these taxes.
- In most cases, this will lead to several thousands of dollars in additional taxes each year for clergy.
- Retired clergy in particular would be impacted by this ruling, given their more limited sources of income to help offset the loss of the income tax exclusion.