TaxAlmanac:Featured article/July 15, 2005
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From TaxAlmanac
Minister / Clergy Taxation
- Note: The following topic was contributed by TaxAlmanac member Gregg Gillaspy, CPA, CFP, who has done a great job with this article. If you have knowledge of this subject, Gregg invites you to join in and help to improve it. Simply select the Read more... link at the bottom, then select the edit tab at the top of that page.
Minister Parsonage and Housing Allowances (Sec. 107. Rental value of parsonages)
Parsonage
- Church owned parsonage provided to a minister to live in while performing ministerial duties for the church. The annual fair rental value is not included in the minister's compensation for federal income tax purposes.
Parsonage Allowance
- That portion of a minister's compensation received from a church which is designated as a parsonage allowance and is used to pay parsonage related expenses.
Housing Allowance
- That portion of a minister's compensation received from a church which is designated as a housing allowance and is used to pay housing related expenses.
Designating a parsonage or housing allowance
- Should be:
- Approved by the church board or congregation.
- Recorded in the church board minutes or in writing.
- Done before the year starts. It can only be put into effect prospectively. A retroactive designation is not allowed.
