Unemployment Taxes

• Key point. Employees of churches and church-affiliated schools are ineligible for unemployment benefits in most states.

An Ohio court ruled that a former teacher at a church-affiliated school was not eligible for unemployment benefits. A woman was employed as a teacher at a church-affiliated school. At the end of her tenure with the school, she applied for unemployment compensation, and her request was denied on the basis of a state law denying benefits to persons "[i]n the employ of a church or convention or association of churches, or in an organization which is operated primarily for religious purposes and which is operated, supervised, controlled, or principally supported by a church or convention or association of churches." The court noted that school employees are ineligible for unemployment benefits if (1) the school is an organization "operated primarily for religious purposes," ...