What Counts for the Housing Allowance (and What Doesn't)

Pub. 517 describes the allowance as covering the costs to provide a home: rent, mortgage payments (principal and interest), real estate taxes, insurance, repairs, furnishings, appliances, and utilities. Food and the cost of a servant aren't included.

Gray areas

Pub. 517 doesn't list internet, cable or phone. Glebetally leaves them out and tells you the total; if your tax adviser says they count, add them under “Other utilities not in the file.”

Itemized deductions still apply

You can still deduct mortgage interest and real estate taxes on Schedule A even though they were paid with a tax-free allowance.

Last reviewed 2026-10-28. General information, not tax advice. Your tax adviser can tell you what applies to you.