26 Mar Can a Minister Claim Housing Expenses When Not Employed?
A minister cannot claim housing expenses for the months they are not employed as a minister.
Section 107 of the Internal Revenue Code specifies that the rental value of a home furnished to a minister as part of their compensation, or a rental allowance paid to them as part of their compensation, is excludable from gross income only to the extent that it is used to rent or provide a home and does not exceed the fair rental value of the home, including furnishings and utilities. This exclusion applies only to the period during which the minister is employed and performing ministerial duties.
In Rev. Rul. 72-588, it was clarified that expenses incurred to maintain a home during a period when the minister is not performing ministerial duties (e.g., during a temporary absence) are not considered amounts expended to provide a home for purposes of Section 107. Instead, such expenses are treated as expenses incurred in the production of rental income if the home is rented out during the minister’s absence.
Therefore, if a minister is not employed as a minister for certain months, they cannot claim housing expenses for those months under the housing allowance exclusion provided by Section 107.
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