Supreme Court Poised to Favor Catholic Charities in Landmark Religious Rights Case

Justices Signal Support for Exempting Faith-Based Organizations from Unemployment Taxes

In a pivotal session on March 31, 2025, the U.S. Supreme Court appeared inclined to side with the Catholic Charities Bureau in its dispute against the state of Wisconsin, a case with significant implications for religious liberties nationwide.​

The core issue revolves around whether Catholic Charities should be exempt from paying state unemployment taxes. Wisconsin law exempts organizations "operated primarily for religious purposes" from such taxes. However, state authorities contend that since Catholic Charities provides social services without direct religious instruction or proselytization, it doesn't qualify for this exemption. The charity argues that its operations are deeply rooted in Catholic teachings on charity and service, thereby warranting the exemption.​

During oral arguments, Justice Neil Gorsuch questioned the state's position, highlighting the First Amendment's principle against governmental preference among religions. Justice Elena Kagan also expressed skepticism about the state's criteria, noting that some faiths do not engage in proselytization, which could lead to unequal treatment under the law.​

The Trump administration has thrown its support behind Catholic Charities, asserting that the Wisconsin Supreme Court misinterpreted federal law by requiring both the organization's motivations and activities to be religious for tax exemption eligibility.​

A ruling in favor of Catholic Charities could set a precedent affecting numerous faith-based organizations across the country, potentially allowing them to opt out of state unemployment systems if they can demonstrate a religious foundation for their services. This outcome might prompt other large religiously affiliated employers, such as hospitals and educational institutions, to seek similar exemptions.​

The Court is expected to deliver its decision by late June. As the nation awaits the outcome, this case underscores the ongoing debate over the intersection of religious freedom and state regulations.

This case affects us Catholics in some meaningful ways, both legally and spiritually:

1. Religious Freedom Strengthened

If the Supreme Court rules in favor of Catholic Charities, it reinforces the idea that our faith-based actions—like helping the poor, the sick, and the vulnerable—are recognized as religious in nature, even if they don't involve direct evangelization. It upholds our right to live out our faith in practical ways without being penalized by the government.

2. Protection for Catholic Ministries

A favorable ruling could protect Catholic ministries across the U.S. from being burdened with regulations that conflict with their faith identity. That means Catholic schools, hospitals, and charities might have more freedom to operate in line with Church teachings without having to sacrifice benefits like tax exemptions.

3. A Broader Witness to Society

This case is a reminder that Catholic values—especially acts of charity and service—are not just nice things we do; they are expressions of our faith. By standing firm in court, Catholic Charities is bearing witness that love of neighbor is part of loving God.

4. A Wake-Up Call

This case also reminds us that religious liberty isn’t something to take for granted. As society becomes more secular, we have to be vigilant, informed, and prayerful. These cases are about more than taxes—they’re about whether people of faith can truly live what they believe in the public square.