Miscellaneous Benefits for Clergy
By Richard R. Hammar, J.D., LL.M., CPA
© Copyright 1991, 1998 by Church Law & Tax Report. All rights reserved. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is provided with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. Church Law & Tax Report, PO Box 1098, Matthews, NC 28106. Reference Code: m28
Ministers are eligible for various benefits under federal tax laws. Most important, they are permitted to exclude from their gross income the cost of owning or maintaining a residence; they can elect (if certain conditions are met) to be exempt from social security; they are not subject to federal income tax withholding (even if they report their federal income taxes as employees); and, they are not considered to be “employees” subject to federal unemployment taxes.1 Most states similarly exempt ministers from unemployment taxes and income tax withholding. Several states exempt parsonages from property taxes, although such states require that a parsonage be owned by the church and not by the minister in order to be qualified for the exemption.
Several states exempt ministration to the sick by prayer from the prohibition against unauthorized practice of medicine and exempt ministers from the penalties imposed upon persons who practice psychology without a license.2 As a result, a minister ordinarily is not in violation of law when he or she prays for the sick. But if a minister persuades a sick person to forego medical treatment and rely completely upon prayer for recovery, the minister may be responsible for any adverse consequences which could have been prevented by conventional medical treatment.3
The Interstate Commerce Act permits common carriers to provide transportation without charge or at discounted rates to “a minister of religion.”4 Various states likewise permit common carriers to provide free or discounted transportation to ministers.
For related information on this topic see the following articles:General Scope of a Minister's Authority
Officer of the Church Corporation
Clergy Authority in Property Matters
Performance of Marriage Ceremonies