Housing Allowance Guide
The Ministerial Housing Allowance, Explained
Plain-English answers to the questions pastors actually ask, built from IRS Publication 517 and other trusted sources. Educational information, not tax advice.
Reviewed by Paul McWilliams, CKA®, financial advisor to pastors, churches, and ministry organizations.
Last updated September 28, 2026 · Written for tax year 2026
Eligibility and the basics
What the allowance is, who can take it, and how a parsonage fits.
Designating the allowance
How the church sets the amount, when, and what cannot be undone.
Expenses and how much you can exclude
What counts, the lesser-of-three rule, and what happens to the rest.
- What expenses qualify for the housing allowance, and what doesn't?
- How much can I exclude? The "lesser of three" rule explained
- What happens if I spend less than my designated housing allowance?
- Can I still deduct mortgage interest and property taxes if I pay them with my housing allowance?
- Housing allowance calculator (lesser of three, free)
- Housing allowance expense checklist (free, printable)
Taxes and reporting
Self-employment tax, the W-2, and the mistakes that cost the most.
- Do I pay Social Security and Medicare tax on my housing allowance?
- Can a pastor deduct mileage, meals, and cell phone costs the church does not reimburse?
- What is an accountable reimbursement plan, and should I ask my church for one?
- How is the housing allowance reported on my W-2 and tax return?
- What are the most common housing allowance mistakes pastors make?
- Housing allowance DOs and DON'Ts
Retirement
The allowance after ministry, and how a church 403(b) interacts with it.
Recordkeeping
What to keep, for how long, and what a receipt has to show.
Important disclaimer
MHA Tracker is an educational recordkeeping tool. Nothing in this app is tax, legal, accounting, or financial advice. The content is based on publicly available sources, such as IRS Publication 517, believed reliable when published, and may not reflect the most recent changes in tax law or IRS guidance. Clergy tax rules depend heavily on individual facts and circumstances, so before making decisions about your housing allowance, compensation, retirement distributions, or tax filings, consult a qualified tax professional experienced in clergy tax matters. Use of this app does not create any professional or advisory relationship, and we expressly disclaim any liability for actions taken or not taken based on its contents.
Start with this year
Enter your designated amount, add what you have spent so far, and you will know where you stand today.