Clergy and Called Worker Services
Oftentimes a religious organization or church will provide a home for their minister and the cost or value of the home is not considered taxable for income tax purposes, even though it is provided as part of the minister’s compensation. Furthermore, if a church does not provide a home or parsonage, the minister can deduct the fair rental value from his taxable income, as long as the value does not exceed the reasonable pay for the minister’s responsibilities.
If the church does provide the minister with a housing allowance as part of his compensation, it is not taxable for income tax purposes. However, the amount of the housing allowance must be specified prior to its being paid.
Ministers may also take deduction for health insurance. As with any self-employed individual, ministers can deduct 100 percent of their health insurance premiums. However, this is only available if the minister is not eligible to participate in a group insurance plan.
Other Minister Tax Considerations
Then Jesus said to them “Give to Caesar what is Caesar’s and to God what is God’s.”
Tax Tips for Clergy and Other Called Workers