DALLAS — A federal district court judge in Wisconsin, as expected, has entered a final order declaring the minister’s housing allowance unconstitutional. The Dec. 13, 2017, order, however, has been stayed for 180 days after all appeals are exhausted, meaning it currently does not have any impact. Observers expect the government to appeal the order.
The minister’s housing allowance exclusion allows churches to designate part of eligible ministers’ income as a tax-free housing allowance. The Internal Revenue Service has interpreted the law broadly to include religious workers of various faiths as “ministers of the gospel.”
The case specifically applies to the cash housing allowance; the part of the tax law that provides for tax-free use of a parsonage or other church-owned home is not impacted.
O.S. Hawkins, president of GuideStone Financial Resources, said the Southern Baptist entity has “monitored these challenges closely and will be prepared to provide amicus briefs at the appropriate time. … We look forward to advocating on behalf of all pastors along with other denominational pension boards and with our Southern Baptist partners.”
GuideStone has advised ministers to consult its annual tax guide, available at www.GuideStone.org/taxguide, and its housing allowance information, available at www.GuideStone.org/housingallowance, to ensure they are properly documenting any housing allowance and reporting it appropriately on their income tax returns. (BP)
Share with others: