Employment & Parsonage
Interesting labor relations !!!
Rabbis & Cantors
Employees of congregations and
also spiritual leaders !
Generally, there is a contract of employment.
NY law - Rabbi’s contract must be voted
on by congregation.
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.
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.
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
Parsonage
Allowable Expenses
Annual Action
Must be submitted in writing to Board of Trustees – estimating, based
on reality, payment for the next year.
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Fair market rental/mortgage
Utilities
Insurance
Repairs & Maintenance
Furnishings
Other
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 ____.
Parsonage
Board of Trustees’ Action
 Annual Letter to Rabbi/Cantor
Dear 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