This advice is not from Your Humble Hacker and Plodding Semi-retired Pastor but from LifeWay leader Thom Ranier. In a recent podcast (Will the Minister’s Housing Allowance Go Away?) he states his belief that ” it is going to go away” and advises pastors to rearrange their finances now to prepare for the loss.
The part of the tax law that provides for the housing allowance on parsonages is not the issue. So, if you live in the humble parson’s domicile on the site of your church then there’s no need to worry. If instead you own your home and receive a cash payment from your church as “housing allowance” a federal district court has already ruled this to be unconstitutional. The matter will be ruled upon by the federal appeals court for Illinois, Indiana, and Wisconsin sometime this year. I expect that they will rule in our favor but that in any case the appeal will be continued to the Supreme Court.
If forced to speculate, and all Ranier or I or anyone can do on this is speculate, I’d fall on the side of the cash housing allowance being protected. My observation and experience is that it isn’t a simple matter for many average and small church pastors to adjust their finances as if the housing allowance was eliminated and Ranier’s advice there isn’t easily followed. I don’t see any tax armageddon happening if the worst case happens, despite chicken little scenarios offered by some defenders wherein churches would be closing, ministers starving and the like. A church that is so weak that the HA for their minister is a tipping point might reconsider their mission anyway.
The arguments can get complex and, as a practical matter, the use of the cash housing allowance by not only church staff but teachers, basketball coaches, and various peripheral “clergy” positions complicates things. I’m not all that impressed with the strength of the arguments put forward that clergy must be given an income tax exclusion by the government in order to protect religious liberty and to avoid excessive entanglement of church and state. That said, it is a very nice tax break and I hope it stays.
As we await the ruling from the federal appeals court, some of the brethren have been busy, as in 5000 pastors rally to defend housing tax break ruled unconstitutional. That one got my attention, What, unruly and angry reverends parading placards in the streets demanding ‘hands off’ of their sacred clergy tax break? No, they didn’t. But they did sign an online petition and are thus likely targets for donations from the petition sponsors. Five thousand isn’t all that many. “Make Hillary Clinton President” got almost 5 million signatures.
I’m on record as saying You can have my housing allowance when you pry my cold dead hands off of it and I filed my tax returns earlier this month maximizing my use of the current law. This Probably saved me a tidy sum I can use for fish bait money. You should do the same.
…but no need to think of such things on The Lord’s Day. There are more important tasks at hand.
