I noticed today, while preparing my taxes, that it's actually advantageous for me NOT to take any housing allowance this year, but to instead report all of it as income. This is a result of several factors: 1) My wife didn't work outside the home at any point during the year, so our income was solely that which we received from the church. And it wasn't much. 2) This caused us to have 0 tax liability (other than social security tax), with or without counting the housing allowance as income. 3) We now have 4 children as dependents (3 biological and 1 foster). 4) Because of the way the Child Tax Credit works, unless we made a certain amount of "earned income," the child tax credit is much lower than it would otherwise be. 5) Therefore, after crunching the numbers both ways, it makes more sense to count the reported housing allowance as income rather than as housing allowance. So here's my question: even though the church reported to the IRS a considerable portion of my salary as housing allowance, can I simply count it all as income instead? I know we're supposed to report any unused housing allowance as income, but can I just count it all as income?