Does Clergy Parsonage – Housing Allowance for Pastors in Los Angeles & California count for
Covered CA & Medi-Cal  MAGI  Modified Adjusted Gross Income?

Clergy, Rabbi, Priest  & Pastor Income for housing allowance

Introduction to excluding Clergy Housing Allowance from MAGI Income

Earnings for Clergy, Pastors, #Priests, Rabbi’s, Iman’s

• A minister – pastor  who receives a housing allowance may exclude the allowance from gross income to the extent it is used to pay expenses in providing a home. Generally, those expenses include rent, mortgage interest, utilities, repairs, and other expenses directly relating to providing a home. The amount excluded cannot be more than the reasonable compensation for the pastor – minister’s services.
  • Definition clergy – you must be ordained, licensed or commissioned.
• If you own your home, you may still claim deductions for mortgage interest and real property taxes. If your housing allowance exceeds the lesser of your reasonable compensation, the fair rental value of the home, or your actual expenses, you must include the amount of the excess in income.
• The minister’s employing organization must officially designate the allowance as a housing allowance before paying it to the minister.
  • Thus, parsonage does NOT appear (check with your own CPA or Tax Attorney) to count toward MAGI, subsidies – advance premium tax or Medi-Cal Qualification.  ^{IRS Tax Topic 417}

Child Pages, Site Map  & Other FAQ’s in the MAGI Section

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