Note that it is not the vestry or governing board’s decision as to the amount you can designate as a housing allowance. Keep a copy of the annual vestry resolution.Keep a record of the three housing allowance methods with your tax records in case you are audited.
If you live in church-provided housing, the housing allowance is the fair market rental value of the church-provided housing, furnished plus utilities.
When the approved amount of compensation is determined to be a Housing Allowance, that amount is not taxed by either the federal or state taxing authorities.
Is The Minister’s Housing Allowance Taxable?
Pastors who qualify for the Minister’s Housing Allowance should request a written statement from their church for the fair market rental value of their home (home, furniture, and utilities) or the annual housing expenses required for maintaining a home. The amount of the housing allowance must be approved by your Church Board and must be recorded in written form. The Minister's Housing Allowance is a great tax benefit-and a great financial benefit-for those who are licensed, ordained, or commissioned as a Minister. What is the Minister’s Housing Allowance? But you’re getting ready to file taxes and need to know if this Housing Allowance is considered income. You’re a minister and you’re currently receiving the Minister’s Housing Allowance.