Can Orthodox Jewish women who work in a religious capacity be eligible for the parsonage exclusion?
At first glance, it would look like they wouldn't be eligible.
The IRS has guidance which states which kinds of religious workers are eligible for special tax treatment. Ministers are those which qualify.
"Ministers are individuals who are duly ordained, commissioned, or licensed by a religious body constituting a church or church denomination.
So it would seem that since Orthodox Judaism does not ordain or commission women as rabbis, they would not be eligible for any special tax treatment, even if they do work in a religious capacity, such as teaching religion.
However, the IRS also includes a Cantor as someone who is eligible for special tax treatment. While cantors are not ordained as a rabbis, the fact that they play an integral part in religious services qualifies them for these special tax rules.
The Agudath Yisroel (an organization that represents Orthodox Jews) memo on clergy notes that cantors should possess an official certification if they want to claim certain tax benefits.
The Agudah memo notes that it is reasonable for a school to pay a parsonage allowance to a female Limudei Kodesh (Jewish religion) teacher who is performing clearly religious functions (e.g., davening with students, teaching Limudei Kodesh, and providing religious counseling) and is appropriately commissioned or licensed.
They advise that such commission or license should be in the form of a certificate from a seminary or other qualified Jewish program designed to prepare Limudei Kodesh teachers (and not from a board of education or other secular organization or school) and should certify that the recipient is authorized to perform those religious functions.
However, it is noted that there is no clear precedent whether an Orthodox Jewish female teacher who has a bona fide certification to teach Limudei Kodesh, and who is employed by a Jewish school for that purpose, is eligible to receive a parsonage allowance.
Therefore, it cannot be stated with certainty that such payments would not be challenged by the IRS, which could affect the tax liability of the teacher and the school’s withholding obligation.
However, it should be noted that such women claiming this status have not been challenged by the IRS so far.
So, Orthodox Jewish women can take advantage of the parsonage exclusion, which exempts their income from income tax (up to the amount they pay for a residence, per year).
Comments