§107 — Title 26 Internal Revenue Code | U.S. Code

Summary

A minister of the gospel does not pay income tax on the rental value of a home provided as part of their pay. A housing allowance is also tax-free, but only to the extent the minister actually uses it for housing and it does not exceed the home's fair rental value, including furnishings and utilities.

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.

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.”

§107 Rental Value of Parsonages