By Msgr. Owen F. Campion

Tax time for priests, too

IRS requires priests to submit tax returns, including value of free Church housing

Now that spring is here and the April 15 deadline is looming, many Americans are filing their tax returns. Diocesan priests are among them. (Priests in Religious orders do not file tax returns because all of their income goes, under their vows, to their tax-exempt communities.)

There was a time when Catholics knew little about priests' income. Now more and more laypeople know about their financial situations because more laity are involved in advising, administering and overseeing Church finances.

In the United States, there is no crisp, one-size-fits-all answer to the question of how much diocesan priests make because each diocese has its own policy.

Such has been the case historically. It can make a big difference.

For example, my first parish bordered another diocese. In my diocese, each priest had to buy his own car, keep the car in repair, put fuel in the car, and insure the car regardless of how often he drove on parish business. We made $50 a month, or $600 a year. Even routine maintenance of the car took a big bite out of my personal budget. I looked ahead nervously to the next quarter when the premium on my automobile policy would be due.

We had no health insurance. But then there was a certain guarantee about health care. Most Catholic doctors and dentists never charged priests a dime. Nuns at Catholic hospitals never charged priests or other nuns.

This was in my diocese. In the neighboring diocese, less than two miles away, parishes bought, maintained, insured and fueled the priests' cars. Priests there received much more than what we were given for celebrating Masses for intentions requested by people, or after funerals, baptisms, or weddings.

Much has changed since then. Everything is much more systematic, involving many people at different levels and under some diocesan policy or civil law.

However, priests' incomes still vary from place to place.

Last year, the National Federation of Priests' Councils published a survey, conducted by William P. Daly, about priests' income for the years 2004-2005.

On average, diocesan priests made $17,192 annually, or $1,433 monthly. On average, each received $3,657 yearly from stipends and money given for witnessing marriages and the like. On average, each annually received $1,661 in kind.

Most dioceses now have some formula for reimbursing priests for expenses of cars. Under Internal Revenue Service regulations in force, reimbursement is provided for miles driven on parish business. Records have to be kept and filed. Most dioceses have policies regarding vacation time, items such as dry cleaning and entertaining and subscriptions to periodicals.

Ninety-two percent of diocesan priests lived in rectories. On average, the value of such housing yearly was $10,567, or $881 monthly, with an additional $4,439 yearly for food, or $370 monthly. Dioceses now carry health insurance for priests. Some dioceses have life insurance policies. Most dioceses have retirement programs, generally funded by monies paid by the priests. Diocesan priests pay into Social Security.

Civil law obliges priests to file tax returns and to pay taxes on all income.

There was a time when priests' personal funds and parish funds were co-mingled to a shocking extent. That day generally is gone. Civil law, Church law and Church policy, prompted at times by bitter experience, require careful accounting of Church finances. Mismanagement and even fraud do happen, but it is no longer easy to mishandle Church money.

Many priests receive generous gifts from parishioners, but many receive little or even none. However, priests have one great benefit. If true to the Church, and to their vocation, they have security.

In my mind, this advantage bests any argument that priests do not make enough. And, as one bishop said, priests' retirement bonus is heavenly.

Msgr. Owen F. Campion is associate publisher of Our Sunday Visitor.