Clergy Residence Deduction

I was in a meeting (September 2021), and the speaker, among other things, talked about the Clergy Residence Deduction and how they had met a few people recently who did not know about this and qualified. 

If you are a clergy member in Canada, you may be eligible for taxable benefits called clergy residence deduction (CRD). 

Who is this for?

Those who hold traditional roles where theological training is required and religious duties are expected from the position. This individual 

is in charge of or ministering to a congregation or is engaged in full-time administrative service by appointment of the denomination

Each group may be slightly different on terms and who can use this, so I highly recommend you speak with your religious group leader, as they may limit who can get it. AS well don’t forget an accountant. 

You will often have to provide a job description of your responsibilities. 

How does it work?

First, get this form – https://www.canada.ca/en/revenue-agency/services/forms-publications/forms/t1223.html

Second, Start filling it out. 

Third, the deduction allows for your home’s fair market rental value to be excludable from your gross income for tax purposes. 

The bottom line is it drops the income you are taxed on.  

If you are renting your home, this still applies to you. Just fill in what you paid for rent. (You may need a letter from your landlord)

There are some possibilities of increased reduction if the church owns the house and receives it as part of the financial package.  

You can have it taken off at the source, or you can receive a refund at the end of the tax year. 

Before sending in the forms, make sure that you save a copy for your own records.