Exempt Employee Housing

• If you are not on a temporary work assignment that requires you to be away from home, you must include any housing for which your employer pays in your taxable income unless you satisfy three requirements. To exclude the housing, the housing your employer provides must be on the same premises as your work location and it must be for the convenience of your employer instead of your own. In addition, accepting the employer on-site housing must be a requirement of your job. This means that it must be necessary for you to properly carry out your work duties.
  
  

Faculty Member Housing

• College professors and instructors often live in housing owned by their college or university employer. And although it doesn't qualify for total exemption from taxable income when off-campus, the Internal Revenue Service does allow you to minimize the amount that is taxable. If the school offers you a below-market rental rate, you can exclude the discount from taxable income provided your annual rent is equal to the lesser of 5 percent of the home's appraised value or the average rent the school collects from tenants who are not employees or students.
  
  

Temporary Job Assignment

• When your employer requires you to temporarily relocate to a different geographic area and you don't anticipate the assignment to last longer than one year, you can exclude any housing your employer pays for from taxable income. If the assignment does last longer than one year, you can still exclude the housing from taxable income provided that you didn't expect the assignment to last that long when you initially relocated. But when your employer entices you to permanently relocate to a new area by paying for all of your housing expenses, the entire amount is part of your taxable compensation.
  
  

Housing for Clergy

• If you are a clergy member, such as a minister, priest or rabbi, the IRS provides you with a special exemption and doesn't require you to report any housing or living allowances you receive as taxable income. However, the value of the housing you receive must reasonably relate to the services you provide to the religious organization. For example, if a church provides a priest with a modest one-bedroom apartment within commuting distance of the church, the value of the apartment is excluded from taxable income. However, if the church provides the priest with a sprawling 10,000-square-foot estate and includes two full-time servants, the housing doesn't reasonably relate to the services a priest provides the church.