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...
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...