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Ministers' Housing Allowance

annsni

Well-Known Member
Site Supporter
Actually, as I understand it, the entire amount of a minister's housing allowance is subject to both Social Security and Medicare taxes, although it is excluded as taxable income. And since ministers are treated as self-employed persons (contractors), they have double the overt Social Security burden of someone who is employed by another person or firm (the employer pays half of the Social Security tax).

This isn't true at all. Housing is not subject to taxes, Medicare or Social Security. It is not counted as income.
 

Squire Robertsson

Administrator
Administrator
Y'all are looking at this question with post-WW2 eyes. To correctly understand the why of the exemptions, you need to look at them with pre-WW1 eyes (the 16th Amendment was adopted in 1913).
Home ownership was made affordable by the widespread adoption of the amortized mortgage after WW2. Non-RCC pastors and their families lived in homes owned by their church (denomination). My great-grandfather pastored Methodist-Episcopal churches in Iowa. My grandmother grew up in a series of parsonages all over that state. RCC priests took\take vows of poverty and lived\live in rectories attached to their parish church. The thinking at that time was clergy were to be available 24/7 for their parishioners, much like on-duty firemen or soldiers\sailors\Marines (no Air Force in 1913).

I'll end my comments here for the moment. Suffice to say, the housing allowance wasn't pulled out of somebody's ear.

Do you even know the reason for tax exemptions for churches and Pastors?

Powerful lobbyists from the SBC, RCC and other major denominations?
 

Reynolds

Well-Known Member
Site Supporter
Y'all are looking at this question with post-WW2 eyes. To correctly understand the why of the exemptions, you need to look at them with pre-WW1 eyes (the 16th Amendment was adopted in 1913).
Home ownership was made affordable by the widespread adoption of the amortized mortgage after WW2. Non-RCC pastors and their families lived in homes owned by their church (denomination). My great-grandfather pastored Methodist-Episcopal churches in Iowa. My grandmother grew up in a series of parsonages all over that state. RCC priests took\take vows of poverty and lived\live in rectories attached to their parish church. The thinking at that time was clergy were to be available 24/7 for their parishioners, much like on-duty firemen or soldiers\sailors\Marines (no Air Force in 1913).

I'll end my comments here for the moment. Suffice to say, the housing allowance wasn't pulled out of somebody's ear.
The practice of tax exemption for Churches, goes all the way back to the times of the founders.
 

Squire Robertsson

Administrator
Administrator
I agree. I just didn't want to get too long and convoluted in my previous post. And the reason some, what to us seem to be rather dodgy "religious" groups, get the exemption is we don't want the government deciding what group is a valid religion and what group isn't.
The practice of tax exemption for Churches, goes all the way back to the times of the founders.
 

OnlyaSinner

Well-Known Member
Site Supporter
follow-up to #49:
As should be obvious, the exemption extends to pastor-owned housing, because to do otherwise would subject those pastors (typically from smaller works) to a tax burden not shared by those doing the same work but with church-owned housing.
 

Alcott

Well-Known Member
Site Supporter
I remember, many years ago now, there was a radio preacher named J. Vernon McGee, who I think had been a Presbyterian minister, and spoke with a hard accent. Once I heard him speaking about the "manse," which churches furnished to the pastor. He was going on about how the value of this manse increased and when the church sold it, was quite a gain. But he complained bitterly that the pastor [he didn't specifically say himself] gets to live there 'as part of the salary package,' but when it's sold he [the pastor] doesn't get any of that gain. Did he think he (or whoever) should? You've got to buy a capital asset to have a gain on it. Renters don't get any of their landlord's capital gain if he sells the property they've live in for a gain. But this just shows that ministers-- many or most of them-- have been trained to think they're really special and should be given benefits to which the 'commoners' are not entitled, andBTW it's more than from the standpoint of taxes.

BTW Social Security has also been mentioned in this thread. Many ministers degrade it, yet most (maybe all) of those are in it. But I have a suspicion that they are in it because their churches-- not they-- pay that percentage for someone self-employed, as ministers are considered to be n those terms.I remember in 1983 a revival speaker was saying, "I paid 2600 dollars in Social Security taxes last year, and folks, I don't really expect to see any of that money." 35 years later we still hear those kind of things. But do any of you guys in ministry who talk about having SS really pay for it yourself? and would you have it if your church didn't pay for it?
 

Salty

20,000 Posts Club
Administrator
What bugs me is that for taxes - a pastor is "self-employed" for other purposes he is an empoyee
Oh - that's right - we are talking about the goverment.
 

Alcott

Well-Known Member
Site Supporter
If you follow the link to information on SS and Ministers you will see that that is actually ILLEGAL.

I just looked at that link, and thus it appears. But I specifically remember the church I was in 30+ years ago, the Chairman of Deacons said in a business meeting that the church had voted "to pay the pastor's Social Security." I think I recall that being the case with the next church I was in, but the memory is less clear.

Assuming this is not a recent part of the regulations, could a church not get around that by just putting some math to work and increasing his salary as much as he would pay in those taxes?
 

atpollard

Well-Known Member
I just looked at that link, and thus it appears. But I specifically remember the church I was in 30+ years ago, the Chairman of Deacons said in a business meeting that the church had voted "to pay the pastor's Social Security." I think I recall that being the case with the next church I was in, but the memory is less clear.

Assuming this is not a recent part of the regulations, could a church not get around that by just putting some math to work and increasing his salary as much as he would pay in those taxes?
I work in Commercial Architecture and Civil Engineering and Churches have a reputation for "just doing" a lot of things. It is not uncommon to find a permitted church building with three or four non-permitted additions. We get to clean up the paperwork before we can start on the new Sanctuary or Fellowship Hall or Education Building.

 
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