Parsonage Allowance

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DEFINITION of 'Parsonage Allowance'

An allowance designated by a church or other organization for its church professionals (clergy) for the expenses of providing and maintaining a home.

INVESTOPEDIA EXPLAINS 'Parsonage Allowance'

This is basically a housing allowance for ministers. Parsonage allowance is excluded from gross income, but it is included under a self-employment tax.

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