Your taxes are due in a few days so here’s an annual reminder that members of the clergy don’t pay income taxes on their residences simply because they’re in the profession. This year the clergy resident deduction is hidden on Line 231 in the general T1 form (as opposed to the T1 Special that most people use) so you probably won’t notice it. Since I’m lazy and nothing else has changed, I can quote me from last year.
Keep in mind the clergy deduction isn’t a simple tax credit like transit passes, education expenses, or charitable donations that only credit you around 15%. Deductions from your net income decrease your taxable income which, in Canada, can mean thousands of dollars a year in reduced taxes. For example, a small town minister earning $35,000 a year likely wouldn’t have to pay any taxes because the clergy deduction would put his taxable income below the basic personal amount.
Why are ministers allowed to avoid paying any taxes? Religions have always enjoyed avoiding taxes as a result of their charitable status (see Day 2 for details) but this is a tax break on the personal incomes of members of clergy. We certainly have our objections to the procedures and practices of all religions, but this is referring to the personal income taxes of one particular profession. If you want to be a priest, that’s fine, but pay taxes on your income just like everyone else.
According to the rules, a minister is defined as someone who:
- is authorized or empowered to perform spiritual duties, conduct religious services, administer sacraments and carry out similar religious functions. Religious functions may include participation in the conduct of religious services, the administration of some of the rituals, ordinances or sacraments, and pastoral responsibilities to specific segments of the religious organization;
- is appointed or recognized by a body or person with the legitimate authority to appoint or ordain ministers on behalf of or within the religious denomination; and
- is in a position or appointment of some permanence.
It seems like a loose definition. It might allow Michael Payton and Justin Trottier (Canada’s only full-time employees who work for an atheist organization) to deduct their living expenses.