Your clergy pension benefit is taxable in most cases, but you may exclude the portion of your pension that you use for housing expenses from your taxable income.
The Church Pension Fund designates the full amount of each pension to retired and disabled clergy as eligible for the housing allowance exclusion, as provided by the Internal Revenue Code. This amount includes:
- Monthly pension benefit
- Christmas Benefit (13th check)
- Resettlement benefit
- "Bridge" payment to eligible retirees under age 65
The amount of housing allowance you may exclude on your Federal income tax return cannot exceed the lowest of:
- The total amount you actually spend in the year for items that directly relate to renting or providing a home, or
- The fair rental value of your home, plus the cost of certain utilities
- Amount in the housing allowance approved by your vestry
Please consult your tax advisor for further information.
The housing exclusion applies only to ordained clergy and ends when you die. It is not available to non-clergy surviving spouses or dependents.