Minister's Housing Allowance

Housing Allowance Worksheet

1Intro
2About You
3Moving?
4Housing
5Review

What is a Minister's Housing Allowance?

A minister's housing allowance is one of the most valuable tax benefits available to ordained clergy in the United States. Under Section 107 of the Internal Revenue Code, a church or religious organization can designate a portion of a minister's compensation as a "housing allowance" — and that amount is excluded from the minister's gross income for federal income tax purposes.

What it covers

The allowance can be used to pay for mortgage or rent, utilities, insurance, furnishings, repairs, and other costs related to your primary residence.

The benefit

The excluded amount is not subject to federal income tax — meaning a pastor earning $65,000 with a $20,000 housing allowance only pays income tax on $45,000. For many ministers, this saves thousands of dollars per year.

Important to know

The allowance must be designated in advance by your church, cannot exceed your actual housing expenses or the fair market rental value of your home, and must be reported as income for self-employment (SECA) tax purposes. This worksheet helps you calculate the right amount to request.

Let's start with the basics.

$

This helps us accurately split your housing expenses if your living situation changes mid-year.

Moving plans

Tell us about your living situation and expenses.

Housing situation *
Ownership
Purchasing a home this year? iIf buying a home this year, your down payment counts as a qualifying housing expense in the year of purchase only.
Mortgage payment iMust be principal + interest on a loan to purchase or improve your primary residence.
$
Homeowner insurance
Annual premium
$
HOA dues
If applicable
$
Estimated rental value iThe IRS requires your housing allowance not exceed what your home would rent for (furnished + utilities). We calculate this automatically.
Unfurnished rental valueWhat a comparable home rents for, unfurnished, without utilities
$

Enter the unfurnished/no-utilities rental value. We add 10% for furnishings and your utility costs to get the IRS "furnished + utilities" cap. Check Zillow or Rentometer.

Utilities
Monthly utilities iElectricity, gas, water, sewer, trash pickup, and local phone. Enter your average monthly total — we multiply by 12.
Electricity, gas, water, sewer, trash, phone
$
Furnishings, repairs & maintenance iCovers furniture, appliances, repairs, remodeling, yard upkeep, and pest control. You must be able to substantiate this with receipts if audited.
Expected annual amount
Choose an estimate or enter your own
Keep your receipts. This is an estimate. The IRS requires receipts to substantiate actual expenses if audited.
Total estimated expenses
$0
Recommended housing allowance designation
—
Complete the previous steps to see your recommendation.

IRS compliance reminders (IRS Pub. 517)

The designation must be made in advance by official action — retroactive designations are not valid.

For homeowners: the excludable amount is the least of (1) the designated amount, (2) actual housing expenses, or (3) fair market rental value. Per IRS Pub. 517.

The housing allowance is excluded from federal income tax but must be included in SECA income on Schedule SE, unless exempt via Form 4361.

The allowance must be compensation for ministerial services only and cannot exceed your total compensation.

Homeowners may still deduct mortgage interest and property taxes on Schedule A even if excluded as housing allowance (the "double benefit").

Keep all receipts. See IRS Publication 517 for complete guidance.

⭐ Bookmark this page to easily return each year when it's time to submit your housing allowance.

Created by Ben Debayle  ·  Last updated March 18, 2026