Level 15

Deductions & credits

Parsonage / Manse: A parsonage/manse allowance paid to you as part of your salary is not income to the extent you use it, in the year received, to maintain and furnish a parsonage/manse. The church or organization that employs you must officially designate the payment as a parsonage/manse allowance before the payment is made. A definite amount must be designated; the amount of the parsonage/manse allowance cannot be determined at a later date. If no part has been officially designated, you must include your total salary in your income. The major tax break granted to members of the clergy is the income exclusion for rental value of parsonages. Ministers may totally exclude the value of a parsonage that is provided them in kind by the congregation. But, where a cash, parsonage, or manse allowance is paid, a minister must include in income the amount that he has not used during the tax year to pay rent or otherwise maintain and furnish a home. Fair rental value of the parsonage, utilities paid by the church, parsonage, utilities, and furnishing allowance is subject to social security tax. If housing is provided to you by your congregation, the parsonage or manse exclusion cannot be more than what is reasonable pay for your services, and is limited to the fair market rental value (including furnishings, utilities, garage, etc.) of the home. This FRV limitation generally does not come into play when a home is provided.



jointly - yes