The Housing Allowance Exclusion permits clergy to set aside a portion of their compensation specifically for housing expenses, shielding that amount from federal income tax. By reducing taxable income, clergy can significantly lower their overall tax burden. Although...
Board Approval Ministers may exclude a designated portion of their income as a housing allowance from federal income taxes—provided it compensates ministerial services. The church board (or governing body) must determine eligibility and formally approve the allowance...
Q: The Church & Clergy Tax Guide says that a pastoral housing allowance is not subject to Social Security tax if the minister receiving it is retired. I am retired, but I am paid a housing allowance while serving part-time as an associate pastor in my church. Do I...