The minister’s housing allowance is the most significant tax benefit available to ordained pastors. Most small church pastors are either not claiming it correctly or leaving money on the table. This guide explains everything you need to know in plain language.
What this guide covers:
- What the housing allowance is and who qualifies (Section 107 IRS Code)
- The three-part test that determines how much you can exclude
- Complete list of qualifying and non-qualifying expenses
- Critical requirements and what happens if you miss the designation deadline
- Parsonage rules and when the church provides housing
- Bi-vocational pastor considerations: SE tax, estimated payments, retirement
- Annual checklist from December through tax filing
Designed for: Ordained pastors, bi-vocational ministers, church treasurers, and pastor search committees setting compensation packages. Updated for 2026.
This resource is for informational purposes only and does not constitute tax advice. Consult a qualified CPA or tax attorney for advice specific to your situation.
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