Clergy's Housing Allowance on 1099-misc

by Cookie
(Franklin, TN)

I have a SELF-EMPLOYED minister for whom I am completing a 1099-misc.


Where do I enter the amount for his housing allowance?

And where do I enter the amount the church has paid for his health benefits?

And I assume his other compensation ("salary") goes in Box 7, correct?

vickey' reply

If he is self-employed and not considered an employee then he is not eligible for health benefits. See this page. So you would include the health benefits in line 7 with his salary.

Then you would report his housing allowance in a church letterhead statement sent only to the pastor.

Know the answer? Face the same situation? Please post your answer or comment by using the "comment" link below. Thank you!


Comments for Clergy's Housing Allowance on 1099-misc

Click here to add your own comments

Feb 14, 2013
clergy housing allowance
by: Anonymous

Does anything have to be reported to the IRS from the church for the housing allowance after the church gives the minister the a letterhead statement?

Feb 14, 2013
A Church Does Not Report a Housing Allowance to the IRS
by: Vickey

No

A housing allowance is reported to the IRS by the minister on his personal tax return.

A church can provide the required information regarding the housing allowance to the minister by a letter as mentioned above or in Box 14 of his W-2.

Box 14 is an "informational" box that employers use to provide information to their employees. The IRS and Social Security Administration will not record the HA amount from it.

Feb 21, 2013
Clergy's Housing Allowance on 1099-misc
by: Anonymous

If the housing allowance is combined with salary in line 7 on the 1099, is it possible to report the full amount of salary (on line 12 on the 1040) and then back out the housing allowance (on line 21 of the 1040)?
Example: 1099 reflects $30K ($15K salary and $15K housing allowance).

Feb 21, 2013
A Housing Allowance is NOT Reported Anywhere on a 1099
by: Vickey

If the housing allowance is combined with salary in line 7 on the 1099, is it possible to report the full amount of salary (on line 12 on the 1040) and then back out the housing allowance (on line 21 of the 1040)?
Example: 1099 reflects $30K ($15K salary and $15K housing allowance).


No. If you put what is currently reported on your 1099 in a Schedule C...$30,000 (assuming you had no expenses) and record that value on line 12 then report the housing allowance on line 21...you would then be paying income and self-employment taxes on $45,000. Line 21 is for other income such as excess housing allowance amounts.

Your 1099 needs to corrected as it is wrong. A housing allowance is not recorded anywhere on a 1099.

Jan 30, 2014
Housing Allowance on 1099
by: Anonymous

If hosing allowance is not reported on 1099, then how will it be included for social security tax purpose?

Jan 30, 2014
Report Housing Allowance on Schedule SE
by: Vickey

It is reported by the minister on their personal income tax return on Schedule SE.

See IRS Pub 517 and this explanation on their site:

http://www.irs.gov/Help-&-Resources/Tools-&-FAQs/FAQs-for-Individuals/Frequently-Asked-Tax-Questions-&-Answers/Interest,-Dividends,-Other-Types-of-Income/Ministers%27-Compensation-&-Housing-Allowance/Ministers%27-Compensation-&-Housing-Allowance

Feb 06, 2014
Housing allowance MUST be reported on 1099-MISC
by: David Randall

See IRS instructions for 1099-MISC. Box 7 non-employee compensation must include ALL compensation paid for which the recipient does not account to the employer. Typically ministers do NOT account to the church for what they actually spend the housing allowance for. Therefore the church has no way to know how much is excludable and therefore MUST include it box 7. The minister is then responsible for determining how much of this allowance is truly tax free and exclude it on his return.

Feb 06, 2014
Reply to David
by: Vickey

I addressed your comment on this post:
http://www.freechurchaccounting.com/is-housing-allowance-paid-to-the-pastor-included-in-the-1099-he-receives-he-does-not-get-a-salary-for-a-w2.html

However...I tell everyone not to believe everything you read on the internet, but to research, research, research!

So here is an excerpt from a very reliable and knowledgeable website...Evangelical Council for Financial Accountability...http://www.ecfa.org/Documents/TheMinistersHousingAllowance.pdf:

"The church treasurer must issue a Form 1099-MISC for unincorporated evangelists if payments have been $600 or more per year (excluding any housing allowance properly designated in advance, 403(b) Retirement Savings Plan contributions, or reimbursed expenses).

Also in the CPA, Dan Bubsy's book:Zondervan 2014 Church and Nonprofit Tax and Financial Guide: For 2013 Tax Returns (Zondervan Church and Nonprofit Tax Financial Guide)
page 80...in the tip box...the designated housing allowance should always be excluded from Form W-2, Box 1, as compensation. (Most ministers/pastors are classified as "employees" of their churches)

He even addresses issuing a 1099-Misc to a traveling evangelists and EXCLUDING any properly designated housing allowances on page 84.

Feb 12, 2014
1099 and housing allowance
by: Rick P

I am an ordained minister. for 16+ years, I worked at a large denominational publishing company that allowed me to continue to maintain and claim the ministerial housing allowance.

In the summer of 2012, my job was downsized and I was released. For all of 2013, I worked for the same denominational agency (editorial work in a different dept). I received a 1099 for all the contract editorial work.

Question: How can I go about claiming ministerial housing allowance?

Jun 06, 2014
housing allowance on 1099 for SCorp
by: Anonymous

I am a clergy but also have an SCorp. Can I have my ministry compensation paid to my SCorp name and also claim 50% as housing allowance. I believe this is allowed as long as the church issues a letter stating the compensation was 50/50.

Click here to add your own comments

Join in and write your own page! It's easy to do. How? Simply click here to return to Fringe Benefits.

Need a Consultation, help setting up an effective Accounting System, or someone to do your monthly bookkeeping?