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Title 26 — Internal Revenue CodeRelease 119-73

§107 Rental value of parsonages

Title 26 › Subtitle Subtitle A— - Income Taxes › Chapter CHAPTER 1— - NORMAL TAXES AND SURTAXES › Subchapter Subchapter B— - Computation of Taxable Income › Part PART III— - ITEMS SPECIFICALLY EXCLUDED FROM GROSS INCOME › § 107

Last updated Apr 6, 2026|Official source

Summary

Ministers do not have to count the value of a home provided to them as part of their pay as taxable income. A housing allowance is also not taxed, but only for the amount actually used to rent or provide a home and only up to the home's fair rental value — that fair value covers furnishings and extras like a garage, plus the cost of utilities.

Full Legal Text

Title 26, §107

Internal Revenue Code — Source: USLM XML via OLRC

In the case of a minister of the gospel, gross income does not include—
(1)the rental value of a home furnished to him as part of his compensation; or
(2)the rental allowance paid to him as part of his compensation, to the extent used by him to rent or provide a home and to the extent such allowance does not exceed the fair rental value of the home, including furnishings and appurtenances such as a garage, plus the cost of utilities.

Legislative History

Notes & Related Subsidiaries

Editorial Notes

Amendments

2002—Par. (2). Pub. L. 107–181 inserted “and to the extent such allowance does not exceed the fair rental value of the home, including furnishings and appurtenances such as a garage, plus the cost of utilities” before period at end.

Statutory Notes and Related Subsidiaries

Effective Date

of 2002 Amendment Pub. L. 107–181, § 2(b),
May 20, 2002, 116 Stat. 583, provided that: “(1) In general.—The amendment made by this section [amending this section] shall apply to taxable years beginning after
December 31, 2001. “(2) Returns positions.—The amendment made by this section also shall apply to any taxable year beginning before
January 1, 2002, for which the taxpayer—“(A) on a return filed before
April 17, 2002, limited the exclusion under section 107 of the Internal Revenue Code of 1986 as provided in such amendment, or “(B) filed a return after
April 16, 2002. “(3) Other years before 2002.—Except as provided in paragraph (2), notwithstanding any prior regulation, revenue ruling, or other guidance issued by the Internal Revenue Service, no person shall be subject to the limitations added to section 107 of such Code by this Act for any taxable year beginning before
January 1, 2002.”

Reference

Citations & Metadata

Citation

26 U.S.C. § 107

Title 26 — Internal Revenue Code

Last Updated

Apr 6, 2026

Release point: 119-73