As taxpayers, ministers are responsible for determining their eligibility for a housing allowance, understanding applicable limits, and complying with all related rules. They must keep records to substantiate the cost of everything they exclude from income as housing expenses. If a church designates more than a minister can claim as a housing allowance in a given year, the minister is responsible for reporting and paying taxes on the correct amount of income. Any excess housing allowance should be reported as income on the minister’s tax return. Ministers must also pay self-employment (SECA) taxes on their housing allowance or on the fair rental value of their home if they live in a parsonage.

For more information, visit the Ministers' Tax Guide