Is the Housing Allowance Going Away?

Last week a Wisconsin Federal District Court judge ruled that the pastoral housing allowance violates the establishment clause of the first amendment. This news can be quite upsetting for church leaders across the country as they try to figure out how to fairly compensate their pastors, and for pastors who need to rethink their monthly budgets now that a major tax benefit has been ruled unconstitutional.

Yesterday morning, Matt Steen and I had a conversation with Mike Batts, managing partner of Batts Morrison Wales & Lee. Mike and his team work exclusively with churches and pastors, and have served as trusted advisors to members of congress on policy issues related to church finances. We asked Mike about the ruling and what church leaders need to know about it. In a nutshell, here is what you need to realize now:

  • The sky is NOT falling.
  • The ruling has no effect on housing allowances at this moment.
  • The ruling will be appealed.

Click below to watch the entire conversation in order to gain a better understanding of what this means for your church:


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