Housing Allowance

For now, the clergy housing allowance is safe!

For those of you who have been following the fight by the Freedom From Religion Foundation (FFRF) to invalidate Section 107(3) of the tax code provision permitting clergy to receive an annual housing allowance – THE FIGHT IS OVER FOR NOW.    At this time the FFRF has decided not to appeal the Seventh Circuit ruling to the US Supreme Court because they do not feel the Court would rule in their favour.   The FFRF hopes to preserve their ability to bring future legal challenges to a more sympathetic Supreme Court. 

The congressional Joint Committee on Taxation estimates the 65-year-old benefit is worth a combined $ 700 million annually.  At the local level, the housing allowance is the single-most valuable benefit to clergy.

With this in mind, all pastors with a housing allowance should review their 2019 housing allowance designation.  If the housing allowance is clearly below actual housing expenses, the pastor should consider asking the session to declare a larger portion of the his/her remaining compensation as a housing allowance.