WASHINGTON -- Clergy members will keep their housing tax break under a bill President George W. Bush signed into law May 20, according to the Associated Press.
The bill protects the "parsonage exemption," which lets ministers, priests and rabbis deduct from their taxable income the portion of church earnings attributed to housing.
The 1921 provision was challenged in the 9th U.S. Circuit Court of Appeals in San Francisco after a local minister was accused of claiming too large a tax break for his home. The new legislation clarifies the exemption and pre-empts the San Francisco case.
Supporters said the exemption is important in rural areas where congregations would be less able to compensate for its loss, making it difficult to attract clergy, according to the Associated Press.
