Appeals Court Upholds Housing Allowance for Ministers

Last month, the Seventh Circuit of the U.S. Court of Appeals unanimously reversed the lower U.S. District Court case’s ruling from October 6, 2017 that the housing allowance for ministers was unconstitutional.

The original ruling from the U.S. District Court in 2017 found the housing allowance for “ministers of the gospel” to be unconstitutional based on it being discriminatory towards religious leaders.

This would have been a huge financial hurdle to ministers if the housing allowance had been reversed, as it is a benefit allowing the amounts to “rent or provide a home…including furnishings and appurtenances such as garage, plus the cost of utilities,” to be excluded from gross income, as stated in § 106 (2) of the Internal Revenue Code.

The reversal from the U.S. Court of Appeals compared the housing allowance for ministers to similar benefits in the tax code for work related housing, and the three judge panel have found it constitutional under the First Amendment and legal precedent.

The Freedom From Religion Foundation (FFRF) has not indicated their intention to appeal the decision to the Supreme Court and are reviewing their options.

If you are interested in reading further, please find the reversal here.