Housing Allowance and Parsonage

Housing Allowance and Parsonage, Are they the same?

Answer

No. A parsonage is simply a place where the minster and his family live. It is owned by the church.

A housing allowance (or parsonage allowance) is a special benefit that ordained ministers receive income tax free.

IRC section 107 permits qualified ministers to exclude housing-related compensation from gross income to the extent it relates to service performed in their ministry.

In plain English: Ministers who own or rent their homes or live in a church provided parsonage may be able to exclude from their federal income taxes a portion of their salary that has been designated by their employer as a "housing" allowance.

The housing allowance is sometimes called a “parsonage allowance” for minister who are provided with a parsonage and a “rental allowance” for ministers who rent their home.

***Note: Even though a housing allowance is excluded from a minister’s federal income tax, it is not excluded when figuring his self-employment tax. (taken from the ebook Housing Allowance)

Hope This Helps,



Click here to post comments

Join in and write your own page! It's easy to do. How? Simply click here to return to Housing Allowance.

If you want to DIY your payroll, I highly recommend you look at using Gusto! It is very user friendly and their support is awesome! Plus they know how to set up and maintain payrolls for churches and nonprofit organizations.

Note: I am a "partner" of Gusto, but as I have told you before ... I never recommend anything that we or our clients have not tried and love =)



Enjoy this page? Please pay it forward. Here's how...

Would you prefer to share this page with others by linking to it?

  1. Click on the HTML link code below.
  2. Copy and paste it, adding a note of your own, into your blog, a Web page, forums, a blog comment, your Facebook account, or anywhere that someone would find this page valuable.