Throughout active ministry, most clergy exclude a housing allowance from their gross income when paying federal income taxes. The good news is that this housing exclusion is available after you retire. At that time, though, the annual conference will become the church entity that determines if your pension payments are designated for the housing exclusion.
You’ll be able to exclude from your taxable income all or a portion of the pension distributions you receive from sources covered by the annual conference’s housing resolution (published in the conference journal and attached below).
The portion of such distributions you may exclude is equal to the smallest of the following amounts:
- the amount designated as a housing exclusion by your annual conference for the tax year in question;
- the amount spent for your housing (mortgage principal and interest, utilities, taxes, insurance, maintenance, etc.); or
- the current fair rental value of your home, including furnishings