Good or Bad? Do You or Your Pastor Use This Deduction? Judge Strikes Down Housing Tax Break for Pastors!!

Reader do you think the court is wrong here in claiming it is unconstitutional? A federal judge has ruled that an IRS provision that exempts clergy from including their rental allowance in their reported gross income is unconstitutional. 

Many parishes provide housing for their clergy. The value of that housing is not considered part of their income. My home church (where I grew up) and the church that I attended since moving to Jacksonville FL, has a parish house where the pastor lives. Many jurisdictions don't like churches owning houses because they cannot charge property tax.

Many pastors prefer to find their own housing. So the IRS decided that a housing allowance equal to the value of providing a parish house would be allowed. This way pastors could buy homes and build equity, local government would be able to tax such properties (since they do not belong to a not-for-profit organization — church), and churches would not have the problems associated with owning a house. 



  1. I currently live in a home I lease but receive a housing allowance. Because of the itinerant ministry of the AME Church, I'm considered as an independent contractor and file a 1099. The housing allowance counts as income and I pay taxes on it. Our church did have a parsonage at one time but most of my predecessors had their own homes so they didn't live in it or get housing allowance back then. My church does pay property tax on all of the properties it owns with the exception of the actual church building.

  2. Render on to Ceasar what is Caesar’s. In other words PAY YOUR TAXES.

    I see churches brag about their contributions to the local community, but MEAN WHILE (in extreme cases) their multi-million dollar facility doesn’t pay a dime for schools, roads, hospitals & trash pick-up because of tax-exemptions.

    In MY PERSONAL OPINION if churches don’t pay taxes they should at least be limited to the amount of property, and businesses they can own. Or put a cap on the amount of money they can make tax free.

    The judge was correct in his assessment.


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