Clergy can still claim a parsonage exclusion on a tax return based on the lesser amount of:
- your declared parsonage amount with RPB,
- your actual allowable housing expenses, or
- the fair market rental value of your furnished home in your neighborhood.
What You Need to Know
RPB facilitates parsonage declarations for retired clergy. Distributions from your 403(b) account are considered taxable income. When retirees draw on their pension accounts in retirement, they are receiving distributions of pre-tax contributions and associated earnings. Clergy can use their parsonage exemption to offset some or all of the taxable income on their distributions depending on their housing expenses. Retired clergy should check with a financial advisor to ensure compliance with the IRS parsonage rules. For specific information on retired ministers’ parsonage benefits from the IRS website, click here: Retired Ministers.
You and your tax accountant are responsible for the calculation and substantiation of the parsonage amount on your tax return.
For additional information on parsonage, including information from the “Minister’s Guide for Income Tax,” please contact the Central Conference of American Rabbis (CCAR) at firstname.lastname@example.org.