Why pastors’ housing allowance is tax-exempt

As we reported, an appeals court upheld the practice of pastors not having to pay taxes on their housing allowance.  But, you might ask, why is that?  Joe Carter explains the history of that provision, putting it into the context of the laws exempting religious property from taxation that go back through English Common Law  into ancient times. [Read more...]

Pastors’ housing allowance upheld

Pastors have traditionally been allowed to take a large percentage of their salary as a tax-free housing allowance.  A lower court last year ruled that the benefit is unconstitutional.  But now an appeals court has overturned that decision, meaning that the housing allowance is still on. [Read more...]

Court throws out pastors’ housing allowance tax break

Pastors and other church workers have long been able to take part of their compensation as an untaxed housing allowance, resulting in substantial tax savings.  But a federal court has ruled in a suit brought by the Freedom from Religion Foundation that the tax break for clergy is unconstitutional.

The ruling has been stayed, pending appeal, but if it stands, pastors and their families will take a significant hit in their income. [Read more...]

Pastors’ housing allowance tax break update

Pastors and certain other church workers are allowed to deduct that portion of their salary used for housing from their taxable salary.  That “housing allowance” amounts to a huge tax break.  As we blogged about earlier, the Freedom From Religion Foundation has challenged that provision in federal court.  But in a parallel case, the United States Supreme Court has ruled that the atheist group lacks “standing” to sue on a similar tax issue, since they have not been materially harmed by the current law.  Some experts are saying that this deals a “lethal blow” to the housing allowance challenge.  See Church LawandTax.com.