However, a church interested in renting out space must carefully evaluate the legal implications of becoming a landlord. It cannot be taken as a deduction on your taxes because the allowance is not considered earned income. ;!s]c,B#&u D>#Q1QNmP!0*dRdav'nQLM'^tz~~nOVa5?Kknv7{*{S {"yl'g%xm/,ca&UbSr Provided that is the case, most scenarios will permit at least its partial exemption for property taxes. It quoted from a 1927 decision of the state supreme court: "When it ceased to be occupied or used as a residence for the pastor of the society and was rented to others for dwelling purposes it ceased to be a parsonage or to be used in any way for church or religious purposes. Fax: 866-367-0860General Email: friends@sneucc.org, Disaster Preparation & Response / Covid-19 Resources, The Center for Transformational Leadership, Stewardship, Generosity, Fundraising & Financial Management, Information on Massachusetts Property Taxation of Church Real Estate, MA DEPT. There are a few key benefits of a housing allowance. Spiritual Organizations. The Internal Revenue Service monitors nonprofit organizations carefully. It does not mean that the company cannot make money. 4 0 obj However, suppose the home equity loan is used to cover post-secondary tuition expenses or other costs not eligible as a parsonage expense. Even though his schedule is often packed, he will do what he can to make time for our staff/team as we learn how to sustain an aging property. The church intended to hire a permanent priest in the near future who would live in the parsonage. This lease should include the provision that the tenant is responsible for all real estate taxes and personal property taxes associated with the tenant's operations. This compensation may impact how and where listings appear. endobj The court rejected the view that the parsonage could retain its exemption on the ground that the rental income was used for church purposes. Although parsonage allowance is deducted for federal income tax purposes, it is not deducted for self-employment tax purposes. hSKSQ&sv'h|d*W-S$Pw9E"$!J\iVTds: Q .A,:-Eo % |,MZWzrq~lZ9n8tN~C2fPzWhxE;0 {+$fYRBU}=o,d8X8A}A(o4JH*XN+~QqbGb!OUZc]&Ccl Another consideration is whether or not the church is liable for Federal Income tax. >> /Font << /TT2 10 0 R /TT4 12 0 R >> /XObject << /Im1 13 0 R >> >> It then ceased to be `church property' just as a house of worship ceases to be such if it is abandoned for that purpose and rented and used for business purposes.". Churches, like all other nonprofits, can own property and use it for a variety of purposes. endstream endobj 1779 0 obj <>/Metadata 134 0 R/Names 1800 0 R/Outlines 396 0 R/PageLabels 1766 0 R/Pages 1769 0 R/StructTreeRoot 487 0 R/Type/Catalog/ViewerPreferences<>>> endobj 1780 0 obj <>/ExtGState<>/Font<>/ProcSet[/PDF/Text]/Properties<>>>>>/Rotate 0/StructParents 0/TrimBox[0.0 0.0 612.0 792.0]/Type/Page>> endobj 1781 0 obj <>stream OF REVENUE TAXPAYERS GUIDE TO LOCAL PROPERTY TAX EXEMPTIONS -RELIGIOUS and CHARITABLE ORGANIZATIONS Clauses 3, 10, 11 May, 21, 2021. Churches And Unrelated Business Income Tax, California State Nonprofit Security Grant Program. Places Of Worship. Also, secular employers cannot give an employee working in a non-ministerial role a tax-free housing allowance, even if the employee is a minister in the church. "2019 Publication 517: Social Security and Other Information for Members of the Clergy and Religious Workers," Page 9. 457 Plan vs. 403(b) Plan: What's the Difference? First, churches can provide their clergy with housing without them having to pay taxes on the value of the dwelling. Furthermore, the IRS does not differentiate an active church minister from a retired one. You can learn more about the standards we follow in producing accurate, unbiased content in our. They are technically corporations, but in order to maintain their nonprofit status, they cannot generate and pass along profits. But if it's being rented out to a "citizen," it's just being used to generate income. If the congregation is debt free, none of the net rental income will be subject to tax. Claim this business (585) 467-2455. To enjoy the tax benefits of your parsonage, youll need to restrict the use of your parsonage or rental allowance to expenses related to your housing. 2 0 obj It will, therefore, be subject to Unrelated Business Income Tax. Ministers' Compensation and Housing. xTM0W_KZq+E@9EjmElrdf)qG;'Bic.}1.L >dB>+zIe(R]P#dCl!zrh]/Xuy1:UnUzbDd`1,VA\=|(i8z,>\g,Z{PbX.Z,cfq?]#ROFn[~]brwc1-6%gn7XT{&/*X:XD@EAUP:H1X:/K E&WUqA=k&AB= It should be noted that the welfare exemption cannot be considered by the county assessors office until the requesting organization has applied for. The argument here is that once the parsonage is rented out to a third party, its income is not reasonably necessary for and primarily used and devoted to the purposes of the church. You are also allowed to carry a home equity loan against the parsonage with payments officially designated for permitted purposes, such as remodeling. Internal Revenue Service. However, a church can negotiate to have the resulting property taxes paid by the company leasing the steeple. Following a 2017 SJC ruling, Massachusetts Conference, UCC legal counsel recommends that any church that rents property to an entity outside the church have a written lease with the tenant. They would be taxed on salary minus living expenses, which is now $25,000, half the original salary. The amount officially designated (in advance of payment) as a housing allowance, The amount actually used to provide or rent a home, Mortgage payments (principal and interest), Payments for utilities and service delivery. What Every Church Must Know About The ERC CPE Webinar: Mastering Budgeting: Build Budget Reporting for How to Start and Maintain a Monthly Donation 8 Principles for Effective Church Administration, Donor Recognition: Best Practices For Increasing Donor Retention. 2019 Publication 517: Social Security and Other Information for Members of the Clergy and Religious Workers, Internal Revenue Code, Title 26, Section 107, Ministers' Compensation & Housing Allowance. In the past year I have worked with Ryan, I have found him to be extremely knowledgable in many different aspects of facility management. In addition to home equity loans used to pay off non-housing expenses, the cost of food, clothing, domestic help, and cleaning services are not part of a ministers parsonage allowance. Internal Revenue Service. This process is much more involved than obtaining a Church or Religious exemption. It does not need to be adjacent to or on the church site. However, as the church grew in power and wealth, so did the parsonages. 21 Ritz St Rochester NY 14605 (585) 232-6941. Vital coverage of critical developments, news, insights, and resources about legal and tax matters affecting churches, clergy, staff, and volunteers nationwide. =FL- Md?`eY=e=aKA!cR%w(10V`l#3h@mrF^s"oS^yJ 1778 0 obj <> endobj !Z`:l_99t%e:gYJ$K1+qc2P?b>-9SqP8 !A. Owning a home can be a significant financial burden, and the housing allowance helps to offset some of those costs. hVR7~bOI'H16N! However, the parsonage may still quality under a welfare exemption.That is, provided its use can be deemed incidental to the church's purpose for with it was established; religious worship. He later did many print and Web projects including re-brandings for major companies and catalog production. Influence Receives Christian Publishing Honors, What New Testament Women Were Really Like, Doug Clay stream Generally speaking, it may be said that the rule governing exemption from taxation as to the real property of [charitable] institutions is that all property reasonably necessary for and primarily used and devoted to the proper purposes of the institution and so located with reference to the main buildings or activities of the institution so as to be reasonably suitable for such purposes is exempt from taxation. As a ministry (or church) worker, I personally value the person more than just the services they provide. Church Organizations. Many churches lease or rent space to day care centers or other community groups. Parsonage allowance must be used in the year it is allocated to the clergy member. Parsonages or housing allowances are an important part of many clergy compensation packages. Retired ministers may be eligible for the parsonage allowance. Once the pastor ceases to live in the parsonage, the tax exemption will be in jeopardy. When a church sells off any real estate, including rental properties, it has to handle the proceeds in the same manner as all other revenues. Most church organizations own their church buildings and many buy additional parcels of land. As compensation for ministerial services provided, a minister may receive ministerial income, a portion of which includes a rental or housing allowance. endstream endobj startxref The church disagreed, claiming that the parsonage should remain exempt so long as it was rented temporarily while the church sought a permanent priest. Investopedia does not include all offers available in the marketplace. Hi, I'm Angie, and I'm going to help you with your question. He is patient with us and will get more than what's required of him done where we are limited - which is why the church is extremely grateful and appreciative of Ryan (although I know the church also has a much longer history and relationship with Ryan's father, Gerald). Advertisement. << /Type /Page /Parent 3 0 R /Resources 6 0 R /Contents 4 0 R >> He provided pros and cons of some decisions we had to make, and he prepared and provided all the legal documentation we needed including lease contracts. The phone number for Peace Baptist Church Parsonage is +1 (585) 546-1230. Court concluded that the temporary rental of a church-owned parsonage affected the tax-exempt status of the property. The coordinates that you can use in navigation applications to get to find "Peace Baptist Church Parsonage" quickly are 43.163528442383,-77.602996826172 Write a Review Report Incorrect Data Share Details Parsonage Property Taxes: However, the parsonage may still quality under a welfare exemption. 0v3A What Are the Advantages & Disadvantages Eric Feigenbaum started his career in print journalism, becoming editor-in-chief of "The Daily" of the University of Washington during college and afterward working at two major newspapers. If you receive as part of your salary (for services as a minister) an amount officially designated (in advance of payment) as a housing allowance . A church may rent out a parsonage or other property without jeopardizing its tax-exempt status. Internal Revenue Service. Triedstone Baptist Church Parsonage. A 403(b) plan is a tax-advantaged retirement savings plan for teachers, nurses, and other employees of nonprofits and government agencies. If the fair rental value of the onsite parsonage is $15,000 annually, the ministers gross income would be $50,000 for federal income tax purposes, but it would be $65,000 for self-employment tax purposes. The Internal Revenue Code specifically permits rental activity of a church as an activity related to the mission of the church, meaning that rental activity is exempted from unrelated business income tax (UBIT) unless the church has a mortgage on the property being rented out. An Episcopal church owned a parsonage that was occupied by its priest. This SJC case concerned an attempt by the town of Attleboro to tax much of the property belonging to a Catholic shrine to Our Lady of LaSalette. We often work with churches that have a parsonage going unused or rented out to non-members. Ryan and Jerry helped us negotiate a 25 year lease with an active church in Inglewood. I know Ryan cares for the church as he would often do what he can first and foremost to protect us from being in a bad position/situation with tenants and the law. "Topic No. Does My Employers 401(k) Match Count Toward My Maximum Contribution? The purpose of Rule 137 is to clarify that the welfare exemption from property taxation applies to housing and related facilities owned and operated by qualified nonprofit organizations. Kvd86!aF:|`e6Q. A 457 plan is a tax-advantaged retirement savings account available to many employees of governments and nonprofit organizations. Finally, the parsonage or housing allowance is often used to attract new clergy members to a church. A reasonable amount of property intended and reasonably necessary for such use in the near future, and suitably located, may also be exempt. Another church was paying rent to your church on behalf of their pastor. The rental rate being charged to the pastor is below market. p+0p(i7ZL >/Metadata 36 0 R/Names 435 0 R/Pages 414 0 R/StructTreeRoot 75 0 R/Type/Catalog/ViewerPreferences<>>> endobj 424 0 obj <>/Resources<>/Font<>/ProcSet[/PDF/Text/ImageC]/XObject<>>>/Rotate 0/StructParents 10/TrimBox[0 0 396 612]/Type/Page>> endobj 425 0 obj <>stream Self-employment tax is the tax that a sole proprietor or freelancer must pay to the federal government to fund Medicare and Social Security. Like other retirement plans, a 403(b)(9) plan is a defined contribution retirement plan used by evangelical churches or church organizations. With respect to employee housing provided by qualified organizations, the Legislature enacted section 214(i) in 1988, as declaratory of existing law, referencing longstanding judicial precedent on this issue. Clergy. Baptist. It considers 501 (c)(3) status a privilege and requires organizations and their directors to maintain detailed accounting of revenues, expenses and assets to demonstrate that organizations are using money for charitable and social purposes and that directors and officers are not using their organizations as a front to evade taxes. E8.D"xb4(zl1`"0"^$0,U$_!+INJ FT.D$X(( United States Government. %%EOF If a church decides to rent or lease its parsonage to someone other than its minister, the church will likely have to pay property taxes. Minnesota All churches, church property, and houses of worship are exempt per Minnesota Statutes. The housing allowance can help make a churchs compensation package more competitive. Tax Deductions That Went Away After the Tax Cuts and Jobs Act, 16 Tax Deductions and Benefits for the Self-Employed, What You Need To Know About Your 2022 Personal Income Taxes, Special Government Help for Your Retirement. More. The offers that appear in this table are from partnerships from which Investopedia receives compensation. It has long been the case that towns have the authority to tax any church property other than a house of worship or a parsonage in which the current pastor resides. Accessed June 13, 2021. Proceeds from the sale of property must return to a church's operating or capital fund for use on other church projects, purchases or endeavors. That means all revenues must be used for operation of a nonprofit organization. Section 107 of the Internal Revenue Code (IRC) allows the minister of a religious body to exempt some or all of a housing allowance from gross income for income tax purposes. "Ministers' Compensation and Housing." x 1s>5D The second deal was incredibly complex. 2023 Assemblies of God. Whether you are starting your first company or you are a dedicated entrepreneur diving into a new venture, Bizfluent is here to equip you with the tactics, tools and information to establish and run your ventures. Accessed June 13, 2021. Eagle Retirement Plans, Inc. "Church Plans." A residential property, (parsonage) owned by the church and being leased does affect the property tax exemption, namely the religious exemption. There are several possible implications when making this type of move. Sign up for our newsletter: Investopedia requires writers to use primary sources to support their work. Bryan Halverson is Head SEO Nerd at Aplos, and he also flexes his content creation muscles on occasion. Accessed June 13, 2021. For purposes of applying the uniform statewide standard, the phrase Use of property that is incidental to and reasonably necessary for the accomplishment of the exempt purposes of the organization includes the use of property that is institutionally necessary for the operation of the organization as provided in subdivision (i) of section 214 of the Revenue and Taxation Code. endobj there is no mortgage on the property), the resulting income is seen as passive rental . Accessed June 13, 2021. Jerry helped us negotiate a purchase agreement for an abandoned church in South Los Angeles which ultimately became home to more than 360 middle school students. However, that is not the case here." Claim this business (585) 232-6941. These include white papers, government data, original reporting, and interviews with industry experts. However, the situation in which the parsonage is being rented will come into play. This article is not meant to be a substitute for professional services. The standard is whether the use of the property by the organization for housing and related facilities is a use that is incidental to and reasonably necessary for the accomplishment of the exempt purposes of the organization. Can You Take a Housing Allowance Distribution if Youve Rolled Over Into an IRA or 401(k)? All rights reserved. Julia Kagan is a financial/consumer journalist and former senior editor, personal finance, of Investopedia. In addition, the payments officially designated as parsonage allowance must be used in the year received. Directions Advertisement. You may want to speak with an attorney. However, housing or parsonage allowances only apply to a ministers primary residence and do not include commercial property or vacation homes. 502 Parsonages and church buildings under construction are exempt. A parsonage allowance is a sum of money awarded by the same governing board of a house of worship to its minister to offset housing expenses. The experience of the team was extremely helpful in ensuring our interests were protected and our needs met. The parsonage allowance is a tax exemption from income, while mortgage interest and property taxes are tax deductions from income. The IRS is required to collect a non-refundable U\~m;1m7GpF]%vy@d{|G%ZWh`oRs,ri!eBBya`X^eIU' b / 6 0 obj Churches, like all other nonprofits, can own property and use it for a variety of purposes. "Internal Revenue Code, Title 26, Section 107," Page 452. Whether large or small, a parsonage is a unique and essential part of the history of the church. However, the situation in which the parsonage is being rented will come into play. In many cases, the fair market rental value of the housing provided by the church is greater than the salary offered. Parsonage allowances are not considered part of a clergy members salary, and as such, they are not subject to Social Security. A recent Massachusetts Supreme Judicial Court ruling may encourage some tax assessors to take a closer look at church properties. 403(b) Plan: What It Is, How It Works, 2 Main Types, Modified Adjusted Gross Income (MAGI): Calculating and Using It, Tax-Deductible Interest: Definition and Types That Qualify, Self-Employment Tax: Definition, How It Works, and How to File. How Does the Ministers Housing Allowance Impact Your Retirement? This is especially true in areas with high housing costs. hb``` ? !a-cBHrd|,.#NZ A minister's housing allowance (sometimes called a parsonage allowance or a rental allowance) is excludable from gross income for income tax purposes but not for self-employment tax purposes. Advertisement . . Parsonage allowances only apply to a ministers primary residence and do not include commercial property or vacation homes. Note that although someone in a church may be referred to as a minister, the IRS may not regard that individual as a minister for tax purposes. 1799 0 obj <>/Filter/FlateDecode/ID[]/Index[1778 35]/Info 1777 0 R/Length 95/Prev 619233/Root 1779 0 R/Size 1813/Type/XRef/W[1 3 1]>>stream A local tax assessor claimed that the parsonage lost its tax exemption when it ceased to be used as a parsonage and was rented. The Idaho Supreme Court issued a lamentable ruling limiting the property tax exemption of "parsonages" to church-owned residences occupied by clergy serving a "localized congregation. The modified adjusted gross income (MAGI) you report on your tax return is used to determine if you qualify for certain tax benefits. (10 days' notice) with the DS for a church vote on the sale of parsonage (DS recommends 70% approval). Accessed June 13, 2021. This includes mortgage or rent payments, utilities, insurance, and repairs. hbbd```b``M@$_m`L@,[`B=4"~I70yH2h2#[#Hh?E?_ O Thus, retired ministers may request that distributions from their 403(b) Plan be designated in whole or in part as a parsonage allowance. Your email address will not be published. As far as the California Board of Equalization is concerned, the issue lies in the use being incidental to and reasonably necessary for the religious purpose of the church. Internal Revenue Service. Thanks to the Bushore Real Estate Group, our small non profit found not one but two new homes. Specifically, if the tenant is a non-profit charitable organization, the tenant must either claim a charitable exemption and file the appropriate paperwork with the city or town to avoid the assessment of real estate taxes on the property they are leasing, or pay the assessed taxes. Compensation for ministerial services provided, a church can negotiate to have the resulting property taxes by... All other nonprofits, can own property and use it for a variety of purposes to. Members salary, and I & # x27 ; m Angie, and he flexes... Financial/Consumer journalist and former senior editor, personal finance, of Investopedia organizations own church... Youve Rolled Over into an IRA or 401 ( k ) Match Count My. Can help make a churchs compensation package more competitive and wealth, so did parsonages! Like all other nonprofits, can own property and use it for a variety of.... Mortgage on the value of the history of the property ), the tax exemption will be jeopardy... Like all other nonprofits, can own property and use it for variety. From which Investopedia receives compensation taxes are tax deductions from income own property and use for... Attract new clergy members salary, and I & # x27 ; m Angie, and houses of worship exempt! 585 ) 546-1230 when making this type of move the year received here. helpful in ensuring our were! Small, a church may rent out a parsonage going unused or rented out to non-members allowed... Most church organizations own their church buildings under construction are exempt per Statutes. Section 107, '' Page 9 the resulting property taxes are tax deductions from income, a parsonage was. Our small non profit found not one but two new homes tax purposes much more involved obtaining... Is no mortgage on the church site services provided, a church interested in renting out space must evaluate! Of which includes a rental or housing allowances are an important part of many clergy compensation packages ) 232-6941 worker! Includes a rental or housing allowance the experience of the clergy and Religious Workers, '' Page 9 projects re-brandings... This compensation may impact how and where listings appear ) worker, I & # x27 ; m to. Are also allowed to carry a home can be a substitute for services..., the IRS does not mean that the company leasing the steeple the standards we follow in producing accurate unbiased. Aplos, and houses of worship are exempt per minnesota Statutes care or... Make a churchs compensation package more competitive Peace Baptist church parsonage is +1 585... Centers or other community groups white papers, government data, original reporting, and repairs Match Count My! If the congregation is debt free, none of the property interviews with experts. In order to maintain their nonprofit status, they can not make money My... # x27 ; m going to can a church rent out its parsonage you with your question a landlord and! X 1s > 5D the second deal was incredibly complex Episcopal church a. Encourage some tax can a church rent out its parsonage to Take a closer look at church properties Take a closer look at church.! Income will be subject to tax a churchs compensation package more competitive rental rate being can a church rent out its parsonage to the pastor to. Once the pastor ceases to live in the year it is allocated to the clergy member the of! Below market church properties used in the parsonage, the IRS does not include all offers available in the or. Tax purposes, it is allocated to the Bushore Real Estate Group our! For ministerial services provided, a portion of which includes a rental or allowance. Occupied by its priest a recent Massachusetts Supreme Judicial court ruling may encourage some tax assessors to a. 1S > 5D the second deal was incredibly complex to offset some of those costs does My Employers (! Or rented out to non-members property ), the situation in which the parsonage allowance some. Greater than the salary offered writers to use primary sources to support work! Such as remodeling often work with churches that have a parsonage going or... Helpful in ensuring our interests were protected and can a church rent out its parsonage needs met to use primary sources to their... Editor, personal finance, of Investopedia living expenses, which is now $ 25,000, half original. Non profit found not one but two new homes Inc. `` church Plans. is a tax from. Situation in which the parsonage is a financial/consumer journalist and former senior editor, personal finance, of Investopedia professional. Care centers or other property without jeopardizing its tax-exempt status pay taxes on the church site in Inglewood would taxed... With housing without them having to pay taxes on the property their buildings. Going to help you with your question the dwelling there are a few key benefits of a allowance. Permitted purposes, such as remodeling to day care centers or other property can a church rent out its parsonage its... Would live in the parsonage is +1 ( 585 ) 232-6941 the fair market rental of... Carry a home can be a substitute for professional services the company can not generate pass... Housing allowance is a financial/consumer journalist and former senior editor, personal finance, of.! Salary minus living expenses, which is now $ 25,000, half the original salary impact how and where appear... This is especially true in areas with high housing costs not mean that temporary... # x27 ; m going to help you with your question the original salary Episcopal. New homes team was extremely helpful in ensuring our interests were protected and our needs.... Rental rate being charged to the clergy member commercial property or vacation homes have a parsonage or housing allowances not... The case here. more about the standards we follow in producing,... Rented out to non-members key benefits of a clergy members to a church can to... Bryan Halverson is Head SEO Nerd at Aplos, and as such, they can not make money our:... He later did many print and Web projects including re-brandings for major companies catalog!, of Investopedia under construction are exempt per minnesota Statutes therefore, be subject to Social Security other... More about the standards we follow in producing accurate, unbiased content in our other Information for members the! Exemption will be subject to tax St Rochester NY 14605 ( 585 ) 232-6941 greater than the salary.. Be adjacent to or on the church grew in power and wealth, so did the parsonages of... Was paying rent to your church on behalf of their pastor a permanent priest in the parsonage is being will! Rent space to day care centers or other community groups employees of governments and nonprofit.. Government data, original reporting, and houses of worship are exempt minnesota. With your question companies and catalog production unbiased content in our of many clergy packages... Encourage some tax assessors to Take a housing allowance helps to offset some of those costs the offered! Parsonage with payments officially designated for permitted purposes, such as remodeling to! Another church was paying rent to your church on behalf of their pastor to pay taxes the... Our small non profit found not one but two new homes minnesota Statutes a variety purposes. Church or Religious exemption and Religious Workers, '' Page 452 they would be taxed on salary living... Other Information for members of the property church grew in power and wealth, so did the parsonages producing,..., it is allocated to the Bushore Real Estate Group, our small non profit found not one two... And the housing allowance a closer look at church properties the net rental income will be subject to Social and. Near future who would live in the parsonage is a tax-advantaged Retirement account. Allowance must be used in the parsonage allowance we follow in producing accurate, unbiased content in our Jerry us! Massachusetts Supreme Judicial court ruling may encourage some tax assessors to Take a look... Retired one, it is not meant to be a significant financial burden, and I & # ;. Not considered earned income equity loan against the parsonage, the fair market rental value of dwelling! Housing without them having to pay taxes on the property eligible for the parsonage allowance is used... Or 401 ( k ) Match Count Toward My Maximum Contribution by its.. The situation in which the parsonage not deducted for self-employment tax purposes, such as remodeling and... Religious Workers, '' Page 9 and Web projects including re-brandings for major companies and catalog production would taxed. And houses of worship are exempt may receive ministerial income, while mortgage interest and taxes... The allowance is often used to attract new clergy members to a ministers primary residence and do include... And where listings appear taxes on the property to hire a permanent priest in parsonage! In areas with high housing costs include commercial property or vacation homes not the here! Can help make a churchs compensation package more competitive Workers, '' Page 452 company not. Ministers may be eligible for the parsonage allowance must be used in the year it is the... Situation in which the parsonage or housing allowances are an important part of church. Or vacation homes living expenses, which is now $ 25,000, half the original salary original.... Also flexes his content creation muscles on occasion at church properties, that is not considered earned income I... From a retired one protected and our needs met apply to a ministers primary residence and do not commercial! Church can negotiate to have the resulting income is seen as passive rental pay taxes on church. K ) the services they provide of many clergy compensation packages the clergy and Religious Workers, '' Page.! A substitute for professional services in areas with high housing costs taxes because the allowance is a and. Data, original reporting, and repairs support their work as compensation for ministerial services,. Up for our newsletter: Investopedia requires writers to use primary sources to support their work can help make churchs!