I'm a minister. Do I have to pay tax on my housing allowance?

There is no tax to report on your tax return for the value of a housing allowance provided to a duly ordained minister, rabbi, or cantor. A housing allowance paid to you if you are a duly ordained minister as part of your salary is not taxable income on your tax return to the extent you use the housing allowance, in the tax year received, to provide a home or to pay utilities for a home with which you are provided. This is true even if the housing allowance is used as a down payment to buy a house. You must be ordained to qualify for this tax free treatment. Special tax rules apply.

The amount of the housing allowance that you can exclude from your taxable income on your tax return cannot be more than the reasonable compensation for your services as a minister. The church or organization that employs you must officially designate the housing allowance payment as a housing allowance before the payment is made. A definite amount must be designated as the housing allowance; the amount of the housing allowance cannot be determined at a later date.

A housing allowance is subject to self employment tax. See "Clergy" below.

Other tax provisions may apply.

Related tax information about a housing allowance

Tax Directory Topics:
Clergy
Income Related Questions and Answers

IRS publications about a housing allowance:
For additional tax information on a housing allowance, refer to Chapter 6 of IRS Publication 17,

Your Federal Income Tax. For information on earnings for clergy, refer to Tax Topic 417. Please read this IMPORTANT Editor's Note regarding navigating IRS publications with Adobe Acrobat Reader.
IRS publications can also be ordered by calling 1-800-829-3676.

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