Monthly Archives April 2024

Lately, I keep getting asked if chaplains at government-owned organizations are eligible for the housing allowance. As I stated in my book on the housing allowance, I was under the impression that government employees other than those in the armed forces are eligible for the housing allowance because on page 9 of IRS Publication 517 it says:

However, other sources make it appear that chaplains in government-owned hospitals are not eligible for the housing allowance. Honestly, I’m not really sure anymore. Since I’m not certain about it, in this post I’m going to share the different information sources that I have found. 

This is what I’ve got for you:

IRS Publication 517

I gave you a screenshot from IRS Publication 517 above. It can be confusing because the same publication also says this:

However, that section is talking about the payment of Social Security and Medicare taxes. After further reading, I believe this is unique to the payment of FICA vs. SECA and does not relate to the clergy housing allowance. 

This is the revenue ruling (71-258) that establishes that government-employed chaplains pay under FICA instead of SECA and this is an article that explains it in a way that you may actually understand. 

CPA Dennis Walsh

Here is a 2015 paper written by Dennis Walsh, a CPA. I don’t know anything about him or his qualifications beyond the fact that he is a CPA, but in reading his paper it sounds like he knows what he is talking about.


Walsh claims that chaplains employed by the federal government cannot claim a housing allowance based on IRS rulings, though he doesn’t provide enough information for me to reference those rulings:  

However, in the same paper, he also states the following:

He also explains that some state governments mandate a housing allowance for their chaplains and even has a list of the states and how they handle it.

CPA Paul Schloemer 

Here is another article written in 2009 by a CPA who is also a Ph.D. I had trouble coming to any definite conclusions based on this article, but he does cite several tax court cases where government-employed chaplains were awarded a housing allowance. Here’s an excerpt for you:

In his article, Schloemer also pointed out that whether a taxpayer is a “minister of the gospel” has also been added to the IRS’ no ruling list. I’ve mentioned it before when discussing the housing allowance in retirement, but the IRS has a list of things they won’t provide guidance on. You can read it here and, as I said, the housing allowance in retirement and whether someone is a minister for housing allowance purposes and numbers 10 and 11. 

Conclusion

I don’t know if this is really as confusing as it appears or if it’s just my long covid brain fog, but since I couldn’t come up with a clear answer I figured the best I could do for you would be to share these information sources. After going through the exercise of writing this all out, I’m still not sure if government chaplains can claim a housing allowance but now I also wonder if the IRS even knows.