Your clergy housing allowance is the lesser of:
- 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.).
In my experience, the designated housing allowance is almost always the lowest value, with the fair rental value hard to pin down unless you are actually renting your home, so the actual costs of maintaining your home are generally not used as Tax Champ Opus 17 says.
If you believe your actual costs are the lowest value, this article may be helpful: How A Cash-Out Mortgage Refinance Affects A Pastor’s Housing Allowance.
For more info see Ministers' Compensation & Housing Allowance
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