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.
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.
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For further information regarding IRS
rules and regulations and your particular tax or IRS situation you should
consult with a Certified Public Accountant, Enrolled Agent, Attorney, or
other tax advisor.
Your Federal
Income Tax. For information on earnings for clergy, refer to 
