The Jewish legal tradition lacks almost any ecclesiastical function that can be performed by ordained rabbis only and recognizes that lay leadership can rise to the level of clergy in functionality, form, title and duties…. [I]in many yeshivas, some women serve in roles identical to those served by rabbis, e.g., supervising prayer, providing religious guidance, teaching sacred texts with religious fervor, conducting themselves as religious role models, and otherwise serving sacerdotal functions. These women are entitled to the parsonage allowance exclusion according to the laws of the United States”.
Tuesday, September 13, 2011
Parsonage for Women: A Money Saving Idea
Hat Tip: a reader
Avi Chai Foundation, based on an essay by Rabbi Michael Broyde, is making the case for female day school/Bais Yaakov teachers to qualify for parsonage.
Parsonage allows a religious institution to pay a "minister" a housing allowance (in short, an amount not to exceed the lower of actual cost or fair market value of a furnished home + utilities + repairs). The institution benefits as parsonage is not subject to the employer payroll tax.
The employee benefits as the parsonage is not subject to Federal Tax. (It does however count as income for the purposes of the Earned Income Credit). The employee pays both halves of the social security tax on their earnings and parsonage. But, because those receiving parsonage are employees rather than a contractors, employers can offer other tax advantaged benefits.
Obviously the female Rabbinate in the Reform and Conservative movement qualify to take parsonage in full. [Updated: I believe that a yoetzet halacha would certainly qualify]. The case for parsonage for Orthodox female religious study staff is a harder case to make given that there are no formal programs for female religious leaders.
I think Rabbi Broyde makes an interesting argument, but not one I'm particularly comfortable with. His argument is as follows:
Certainly we aren't the only tradition for which lay leaders can perform any function. In fact, I believe that the Mormon Church has only lay leaders who have achieved various ascending rank who serve as lay leaders and preside over religious life in addition to regular employment.
Also, it is hard to have a leg to stand upon regarding women having a leadership function when the Orthodox world has been fighting such within its own daled amot. There is, shall we say, little precedent.
According to the Avi Chai blog post, there are already Modern Orthodox and Chareidi schools claiming parsonage for women. I don't believe that this is done where I am and I don't know any CPA that would recommend as such.
So, feel free to comment here or there. I don't think this is a shoe-in, especially as parsonage is generally reserved for those who are ministers inside of churches (or Rabbis inside of synagogues). I know of no other religious group, save the Amish, that has their own schooling system. I think there is a fine line between taking full advantage of the tax law and acting rashly. But, there is no question that there are savings to be recognized.
Some after notes and thoughts:
**I certainly believe that functioning yoetzet halacha would qualify for parsonage.
**It would be interesting if those who work in the schools could give the readership an idea of what percentage of women limudei kodesh teachers have husbands who do NOT have a parsonage through their own Rabbinic post or teaching post. I don't want to venture a guess, but at least as you move right on the spectrum, it is my observation that kli kodesh come in pairs.
**Worthwhile reading (hat tip: Tax Prof blog). Cordozo Law and Gender Journal, ORTHODOX JEWISH WOMEN AND ELIGIBILITY FOR THE PARSONAGE EXEMPTION, Jacob Lewin analyzes Rabbi Broyde's view which he views as overstepping and perhaps even abusive. Excellent read.
1. Does the person administer sacerdotal functions customarily
administered only by clergy? 2. Does the person conduct worship
services? 3. Does the person perform services in the control, conduct, and
maintenance of a religious organization? 4. Is the person considered a
spiritual leader by his or her religious body? 5. Does the person have a
formal license, commission or ordination?