Clergy Taxes & The Housing Allowance

The issue of clergy taxes can be an easier process by using the necessary information available to you. The General Council on Finance and Administration (GCFA) of The United Methodist Church is a great resource on clergy taxes. GCFA offers a tax packet through their Web site; the packet discusses tax topics such as IRS audit guidelines, tax limits, tax status of deacons, travel and moving expenses, exempt status of churches, accountable reimbursement policies and much more.

Tax packet

Clergy Taxes and IRS Housing Allowance Exclusion

Reverend Warren challenged the IRS ruling disallowing his housing exclusion to the extent that it exceeded the fair rental value of his home. He won by overwhelming majority vote in Tax Court but was later challenged on appeal by the IRS. The appeal process lead to ratification of the Clergy Housing Allowance Clarification Act of 2002.

Housing Allowance

GCFA offers a comprehensive Q and A on their Web site concerning housing allowance issues, available as a PDF. Topics discussed include a definition of the housing allowance, fair rental value of a parsonage, cost of a housing allowance, utility cost exclusion from gross income, record-keeping, and much, much more.

Also included in the PDF are samples of a housing allowance resolution (to be inserted in the minutes of a meeting), a housing allowance notification by the church, and a housing allowance estimate worksheet.

Clergy housing allowance Q and A