Employment

1
Employment Parsonage

• Interesting labor relations !!!
• Rabbis Cantors
• Employees of congregations and also
  spiritual leaders !
• Generally, there is a contract of
  employment.
• NY law - Rabbis contract must be voted
• on by congregation.

2
Parsonage

• Sec. 107 of IRC
• Rental value of Parsonages
• In the case of a minister of the gospel, gross
  income does not include -
• (1) The rental value of a home furnished
• to him as part of his compensation or
• (2) The rental allowance paid to him as part
  of his compensation, to the extent used by him to
  rent or provide a home.

3
Parsonage

• This section of the tax code is quite old -
  hence the language of minister, gospel, etc.
  - originally for church circuit riders.
• This has been expanded to include cantors
• It has been expanded to include the fact pattern
  of a minister owning or renting a home and not
  just using congregational lodging.

4
Parsonage

• Requirements for Synagogues
• Trustees need annual expense information
• from Rabbi / Cantor
• Actual expenses based on reality
• Not for negotiation - Not a percentage of
  salary
• No double-dip no congregational house
• parsonage amount
• Annual decision by Trustees
• Formal action at a meeting before beginning
  of year
• Pass a resolution and give Rabbi a letter

5
Parsonage

• Allowable Expenses
• Annual Action
• Must be submitted in writing to Board of
  Trustees estimating, based on reality, payment
  for the next year.
• Fair market rental/mortgage
• Utilities
• Insurance
• Repairs Maintenance
• Furnishings
• Other

6
Parsonage

• Board of Trustees Action
• Resolution at a meeting
• The Board of Trustees at a meeting on December
  ___ after reviewing the parsonage expense form
  for the upcoming year, on motion duly made and
  seconded, adopted the following
• RESOLVED, that the amount of _______ be
  designated for ________ as parsonage allowance
  for the year ____.

7
Parsonage

• Board of Trustees Action
• Annual Letter to Rabbi/CantorDear Rabbi ____
• This is to advise you that at a meeting of the
  Board of Trustees on December ____, your
  parsonage allowance for the year ____ was
  officially designated and fixed in the amount of
  _______. The balance of your compensation will
  constitute regular compensation. Under section
  107 of the Internal Revenue Code, an ordained
  rabbi is allowed to exclude from gross income the
  parsonage allowance paid to him/her as part of
  his/her compensation to extent that it is used by
  him/her to provide a home. You should keep an
  accurate record of your expenses of providing a
  home in order to substantiate any amounts
  excluded from gross income in filing your federal
  income tax return.
• Sincerely