Tax Issues

Clergy Housing Allowance Exclusion
In retirement, the Clergy Housing Allowance Exclusion (CHAE) can be a major economic benefit. All the income you receive from the General Board of Pensions can be qualified as Housing Allowance to the extent that it is used for qualified housing expenditures and does not exceed the fair market rental value of the home. See Clergy Housing Allowance.

In retirement, home-owning clergy use the CHAE for both the principal and interest payment on their mortgage as well as their real-estate taxes in addition to the other qualified housing expenses.

Death of the Clergy
The CHAE is only available to the clergy. Should the clergyperson die before a non-clergy spouse, the General Board of Pension retirement income will become taxable to the non-clergy spouse.

Federal Schedule “A” Deductions
Mortgage interest, as well as real estate taxes, may still be claimed as a deduction on Schedule “A” even though they have been paid with tax-free money.