Federal judge’s ruling may alter income tax allowance for clergy housing

A federal judge in Wisconsin has ruled that a law that gives clergy tax a free housing allowance is unconstitutional.

An Associated Press story posted by the Religion News Service (Oct. 10, 2017) reports that the federal law passed in 1954 states that a “minister of the gospel” does not have to pay income tax on compensation that is designated part of a housing allowance. Under the law, housing allowances paid as part of clergy salary can be subtracted from their taxable income.

The report notes that U.S. District Judge Barbara Crabb ruled Friday (Oct. 6) that the exemption provides an unconstitutional benefit to religious persons and no one else, violating the establishment clause of the U.S. Constitution.

The report goes on to maintain that the benefit saves clergy, including non-Christian religious leaders, $800 million a year in taxes, according to the latest estimate from the congressional Joint Committee on Taxation.

For the entire RNS report, click here.

For two responses to the federal judge’s ruling, click here.

And here.