Parsonage Allowance

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Parsonage Allowance

The housing allowance for a priest, minister or other clergy member (or the equivalent). The parsonage allowance is tax deductible for purposes of calculating the income tax owed, but not for calculating the self-employment tax. See also: Form 4361.
References in periodicals archive ?
The Clergy Housing Allowance Clarification Act applies only to housing allowances and parsonage allowances for federal income tax purposes.
Deductions for a home office rarely are allowed since churches and temples usually provide an office, and parsonage allowances already are excluded from income.
Retirement benefits and parsonage allowances paid to ministers after retirement are no longer subject to self-employment tax, retroactive to 1994.
107-1(b) requires parsonage allowances to be designated in advance by the employing church or other qualified organization.
83-3 precluded deductions for home mortgage interest and real estate taxes allocable to parsonage allowances excluded from gross income.