In October a U.S. District Judge found that Section 107 of the US code violates the U.S. constitution. Section 107 excludes the fair rental value of a parsonage or the housing allowance from income for income tax purposes. On February 8, 2018 both the IRS and the intervenors filed notices of their intent to appeal the District Court’s ruling. As a result, the case is now in the hands of the US Court of Appeals for the 7th Circuit.
At this moment in time, churches should continue as done prior to this case finding. The housing allowance is still excludable from a licensed, commissioned or ordained minister’s income as they provide ministerial services. Click here to read more details about the case.