Even if you own two homes, you can only use housing expenses of one home for the housing allowance. A federal appeals court in 2012 ruled that only housing expenses for your principal residence can be used for your housing allowance, even if you are paying on two homes.
However, this does not prevent you from claiming the housing allowance on different homes throughout the year. If you move, you can claim the allowance on the first home while you live there and on the second home while you live there- You just can’t claim the expenses on both of them simultaneously.
What about two Ministers who are married and live in different homes?
If a clergy couple serves in two locations, lives in separate homes, and each has a designated housing allowance, each of them can technically claim housing expenses for their own individual allowance. However, this situation is likely to raise questions from IRS. It is recommended that the clergy couple have solid documentation of the reason for and the professional necessity of maintaining two separate homes.
If you have more questions about the Clergy Housing Allowance, CFR can help. Visit our website at https://www.clergyfinancial.com/resources/proadvisor/ to schedule a Pro Advisor appointment today to answer your questions.
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Clergy Financial Resources serves as a resource for clients to help analyze the complexity of clergy tax law, church payroll & HR issues. Our professionals are committed to helping clients stay informed about tax news, developments and trends in various specialty areas.
This article is intended to provide readers with guidance in tax matters. The article does not constitute, and should not be treated as professional advice regarding the use of any particular tax technique. Every effort has been made to assure the accuracy of the information. Clergy Financial Resources and the author do not assume responsibility for any individual’s reliance upon the information provided in the article. Readers should independently verify all information before applying it to a particular fact situation, and should independently determine the impact of any particular tax planning technique. If you are seeking legal advice, you are encouraged to consult an attorney.
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