No, you cannot use the unused portion of your housing expenses from your W2 income to offset your 1099-NEC income. However, if your clergy pension plan permits it, you may be able to use your remaining housing expenses to reduce the taxable portion of your pension distribution.
A retired clergy member can often reduce their taxable pension distribution by using a housing allowance if their pension plan permits it and the housing expenses are properly designated and documented. To qualify, the amount excluded is limited to the least of the designated allowance, the actual housing expenses incurred (including rent, mortgage, utilities, and repairs), or the fair rental value of the home.
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