It is not exactly a deduction unless your husband is self employed. This is where you will find it: Include any amount of the allowance that you can't exclude as wages on line 1 of Form 1040, U.S. Individual Income Tax Return. Enter “Excess allowance” and the amount on the dotted line next to line 1.
A minister's housing allowance (sometimes called a parsonage allowance or a rental allowance) is excludable from gross income for income tax purposes but not for self-employment tax purposes.
If you receive as part of your salary (for services as a minister) an amount officially designated (in advance of payment) as a housing allowance, and the amount isn’t more than reasonable pay for your services, you can exclude from gross income the lesser of the following amounts:
- the amount officially designated (in advance of payment) as a housing allowance;
- the amount actually used to provide or rent a home; or
- the fair market rental value of the home (including furnishings, utilities, garage, etc.).
More from the IRS on this topic:
https://www.irs.gov/taxtopics/tc417
If you have other questions about this, ask in the comment section below.
