Takeaways from the Recent Housing Allowance Ruling

Source: Christianity Today

The following information was adapted from an article by Richard Hammar that was published by Christianity Today. You can read the full article here.

  1. The decision does not apply to the income tax exemption a pastor receives when living in a parsonage provided by a church to a minister as compensation for ministerial services. The decision focuses only on homes owned by or rented by the pastor.
  2. The decision does not go into effect unless a ruling by the federal court of appeals upholds the lower court decision. A ruling is not expected until late in 2014. For now the housing allowance remains in effect.
  3. If the appeals court affirms the decision and it is not appealed or the Supreme Court does not accept the appeal, the decision only applies to the three states, Illinois, Indiana and Wisconsin, that the appeals court covers.
  4. The district court in Wisconsin ruled the housing allowance unconstitutional because it is not available to other taxpayers.

MMBB is working with the other organizations that represent faith based institutions to develop a response to this court decision. We will continue to keep you informed about developments in this case. In the mean time, don’t hesitate to contact your elected officials to educate them about the importance and value of the housing allowance to your ministry and the communities you serve.