Pastor Parsonage

by Gerald
(Michigan)

What are some of the benefits to the ministry in having a parsonage instead of providing housing allowance?

Comments for Pastor Parsonage

Feb 29, 2012

Parsonage and parsonage allowances
by: Marcusintexas

This is not an either/or situation. According to federal (IRS) guidelines, it is possible for a church to provide a pastor with both a parsonage and a reasonable parsonage/housing allowance. Pastors are not required to include the fair rental value of the parsonage in their income, and the portion of their income that is designated "in advance" (during the church's annual budgeting process)as parsonage/housing allowance does not need to be included as income for tax reporting purposes to the extent that the allowance is being used to pay for parsonage expenses such as utilities, repairs and maintenance of the parsonage, and furnishings. However, it will be very important for the pastor to maintain carefully documented records of such expenses should the IRS auditors come knocking on the parsonage door.

Feb 01, 2013

Church Provided Parsonage and Self-Employment Tax
by: Vickey

Marcus is right. I just wanted to add that if a minister lives in a church-provided parsonage, even though the minister is not subject to income taxes on the use of the parsonage... the fair rental value of the parsonage (plus utilities if paid by church) has to be added when figuring their self-employment tax according to IRS Pub 517 (pg 7)... unless they have opted out of social security.

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