What Is a Pastor’s Housing Allowance and Why Is It Tax Exempt?

The other day, a Federal Appeals Court upheld the tax exempt status of the clergy housing allowance. Since I am back in the business of owning a home, I had a vested interest in how this case would turn out. But I realize most folks have no idea what a Pastor’s housing allowance is and why it has been exempt from taxes.

Here is a clear explanation of the history of the exemption and why there are no taxes upon it.

I feel that sometime in my lifetime the tax code will be changed and there will be more taxes imposed upon religious organizations. What those taxes will be is not yet clear but there is enough movement in our country in recent years that there are indications things will be changing for churches regarding their tax status.

In the meantime, I will be taking advantage of the current tax code (just like all of you should be doing) as I pay my share of taxes.

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