Qualifications as a "minister" per IRS/Tax definition and Housing Allowance

by Kevin
(Dillsburg, PA)

I am a pastor of a Church through a recognized denomination.

I will be installed (commissioned?), however I am not "ordained."

From what I understand, you can not take a housing allowance (my own home) if you are not the equivalent of an ordained minister.

The only duty I can not perform currently legally in PA is to marry others. Does anyone know, does this qualify me for a housing allowance? Thank you!

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Who Qualifies For Special Tax Treatment As A Minister?
by: Vickey

To be classified as a minister, the IRS uses 5 "tests".

The first one is a must:

1) Be licensed, ordained or commissioned. (Treas. Reg. § 1.1402(c)-5 requires that an individual be a "duly ordained, commissioned, or licensed minister of a church." The Tax Court has interpreted this phrase to be disjunctive,
finding the purpose is not to limit benefits to the ordained, but is to prevent self appointed ministers from benefiting.)

Note: If you are "commissioned" you are usually classified as a minister for tax purposes.

The next 4 are more flexible:

2) Administer the sacraments of the church (weddings, funerals, baptisms, and communion, etc...)

3) Be considered a religious leader by the church

4) Conduct religious worship

5) Have management responsibilities in the church

NOTE: a Pastor is almost always considered a clergy for tax purposes.

Being classified as a minister qualifies you for the special tax provisions available to ministers such as a housing allowance.

A great resource for determining if you qualify as a minister is the IRS Ministers Audit Techniques Guide: https://www.irs.gov/pub/irs-utl/ministers.pdf

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