Setting Up a Housing Allowance

A housing allowance (HA) is the greatest tax benefit available to ministers. It is also one of the least understood.

Setting Up a Housing Allowance

It is simply a portion of a minister’s compensation that is so designated in advance by the minister’s employing church. See this article on Is Designating all Salary as Housing Allowance Permissible?

It is very beneficial for ministers because an allowance for housing is excluded from federal income tax. However, it is not exempt from the minister’s self-employment tax...more on that later.

In order to qualify for the exclusion from federal income tax, two very important conditions must be satisfied:

  • The HA must be board approved before it was paid (A housing allowance is NEVER retroactive)
  • The minister actually spent the allowance on eligible housing expenses during the year

Your church must designate a HA before any payment is issued. This designation should be included in a board approved resolution and properly documented in the church records. It should be reviewed and adjusted before the beginning of each new budget year.

Your church does not have anything to do with the second condition. The minister has the responsibility of tracking actual housing expenses and determining the fair rental value of the housing.

A church's governing body/board can set up and approve a housing allowance any time during the year, but the minister needs to be made aware that when it comes to claiming the housing allowance exemption ... they can only claim eligible housing expenses incurred AFTER the HA was approved!

Housing Allowance Expenses and Taxes:

This How To Book for Churches is packed full of tips for: 

  • setting up internal controls,
  • setting up an effective fund accounting system,
  • handling and tracking contributions,
  • setting up compensations for a minister,
  • handling a payroll for a church
  • preparing nonprofit financial statements,
  • and much more.

Read more!

An HA may be used for any expense relating to renting a home, purchasing a home, and maintaining a home. Some of the eligible expenses are:

In regards to taxes, if a minister lives in a church provide parsonage, the minister is not subject to income taxes on the use of the parsonage.

However, the fair rental value of the parsonage (plus utilities if paid by church) is added when figuring his self-employment tax. (The minister is responsible for determining the fair rental value of the parsonage.)

The same goes for a HA paid to ministers that own or rent their homes. The eligible HA amount is exempt from federal income taxes, but not from self-employment taxes (Social Security and medicare) unless a minister has filed a Form 4361 and been approved to opt out of social security.

A nonexempt qualifying minister with an approved and designated housing exclusion must report the lesser of the following amounts on a SE schedule on their personal income tax return:

  • The amount actually spent on eligible housing expenses.
  • The fair market rental value plus furnishings and utilities.
  • The amount officially designated in advance as HA.

Generally, a housing allowance is exempt from most state's income tax....however, a reader in Pennsylvania said that the payments were not exempt from taxes in his state...so be sure and check you state's income tax requirements.

Another tax factor to keep in mind is the Deason Rule. It is based on a tax case going back to 1964.  It applies only to minister who are able to take a business expense deduction for unreimbursed business expenses.

According to the IRS: “A minister may deduct ordinary and necessary business expenses. However, if a minister's compensation includes a housing or parsonage allowance which is exempt from income under IRC § 107, the prorated portion of the expenses allocable to the tax exempt income is not deductible, per IRC § 265, Deason v. Commissioner, 41 T.C. 465 (1964), Dalan v. Commissioner, T.C. Memo. 1988-106, and McFarland v. Commissioner , T.C. Memo. 1992-440.” (Excerpt from the MinistryCPA)

It gets pretty complicated, so if you are a minister that claims unreimbursed business expenses AND have an allowance for housing and/or live in a church-provided parsonage ... consult a knowledgeable tax professional or research this rule BEFORE you prepare and file your personal tax return.

A Housing Allowance and the Church:

The church is not required to report the minister's allowance for housing to the IRS. However some churches choose to report it in Box 14 of the minister's W-2 (which is labeled “Other”) as a courtesy to the minister.

Note: Box 14 on a W-2 is an "informational" box that employers use to provide information to their employees.

A HA is reported to the SSA and IRS by a minister on Schedule SE of Form 1040.

Another option churches have to report a minister's HA is to include the amount of the allowance in a separate letter to the minister. (This separate letter should not be sent to the IRS and will not be included or attached to the minister's personal tax return.)

To receive the special tax treatment of a ministerial HA, the employee must meet the IRS’ 5-test definition of a minister found in section 107 of the IRC. See this page on clergy taxes for more details. Nonminister employees are not eligible for a HA.

Want to learn more about setting up and administering a minister's HA?

The Housing Allowance Handbook, Clergy Tax Handbook and Housing Allowance Tracking spreadsheet are included in:

Enter your title of your tip, idea, comment, or question in the text box below.

Keep the title as short as possible, but interesting enough to make people want to click on your title.

Then click on the link below it that says: Click here to see the rest of the form and complete your submission.

Write your post.  Elaborate and give all the details necessary to properly convey your meaning or question,

Please be aware that with my Bookkeeping company, building and maintaining web sites, and my volunteer work at my church, I cannot possibly answer and comment on every submission.

However, your opinions, questions, and comments are very valuable to me...so I will try to answer questions when I can, but I am relying on the goodness of others to help here:)

Important! Comments used to go live without my approval. I would have liked to keep it this way, but there are some that take advantage of that. As a result of their blatant disregard of my request to stop posting their spam on this site... I now must approve comments first. I apologize for this inconvenience and will post your comments asap.

Note:  Please use site search before posting a question. This site has over 1500 pages, so your question may have been asked and answered already. Google has also started penalizing me for duplicate content so I can no longer post questions that have already been posted.




Questions and Comments on a Housing Allowance

Do you have a question or comment about a housing allowance? Share it!

Archive of Housing Allowance Q&A

The following comments, tips, and Q/A were provided by FreeChurchAccounting's generous readers:

Does housing allowance qualify as income in order to qualify as an exempt employee? 
Employees are required to earn $46,476 per year in order to be considered exempt employees in the State of California. Would housing allowance be added …

Gifting a Home to Minister 
A home was given to our church as a gift from a family member after their parents passed away. Can our church gift this home to our associate pastor? …

Is the cost of replacing a driveway eligible for the housing allowance?  
Is the cost of replacing the driveway eligible for the housing allowance, or is it considered a capital improvement and therefore not eligible? …

Which year can a charged purchase be deducted? 
Which year can a charged purchase be deducted? Year of of charge or year of payment? We wish to purchase(charging in December) matteress in 2016. Payment …

Minister has no mortgage payments on house he owns 
If a minister owns his home, having no mortgage payments, can the minister include in the HA the fair rental value of his home for the purpose of adding …

building a garage 
I own my home out right, no mortgage. Can I use a HA to build a garage?

Housing Allowance for Extra Home Loan Payments? 
I am a youth pastor who is in his 2nd year of owning home. I have a large housing allowance designated by my church and am wondering if I can include extra …

Parsonage allowance for new condo moved into during the year 
Next year we'll be renting until August-September, then moving into a new condo we're purchasing. I'll still be serving the same congregation as its pastor …

Seconding 
I have been approached by someone employed by a registered not-for-profit ministry to ask if we would "second" him. By that he means we would officially …

What if minister under-declared housing for entire year? 
Before the new year comes, our pastor's fill out and sign a Salary Alignment detailing how much they are designating for their Base Salary and Housing …

Parsonage allowance and owner occupied rental home 
The Minister lives in a 2 family home and receives rental income in this 2 family home. Should his FMV of actual expenses be calculated and reduced by …

Is a housing allowance considered earnings for purposes of figuring a wage garnishment on a pastor? 
We have a pastor that has been presented with a wage garnishment due to a medical debt. I am calculating the amount of garnishment and I am not finding …

Wages report on w-2 
Have more questions? Our How To Guide can help! I am a pastor of a small congregation that is paid 4000.00 yearly. For 2015 1000.00 …

Can I use my own labor as a housing allowance expense?  
Is it possible to claim a dollar amount per hour when repairing my home when adding up housing allowance expenses? Septic Field Replaced Windows Replaced …

Can a housing allowance be reduced when donations fall off? 
Can a housing allowance be reduced when donations fall off?

HA if the home is paid for or if the minister is paying cash as he builds? 
My husband is a qualifying minister and we normally receive HA for our current home which has a mortgage. If we sell and use our equity to build and pay …

Parsonage allowance when a minister refinances his home 
A minister takes on a mortgage to purchase his own home. After several years, he has paid down or paid off the mortgage. He then refinances the home, …

Can a cell phone bill count towards housing allowance? 
We are a new church plant with no offices. We work from our home and our cell phones are used for church and personal calls. We also have 2 teenage daughters …

Pastor desires to purchase church supplied parsonage 
Our Pastor of 10 years wants to purchase the parsonage he is living in. He is planning on retirement and wants to build up equity in a home. He would like …

Severance paid as housing? 
Can our pastor who is no longer an employee be paid his severance pay as a housing allowance? Would we report this as a 1099? We will be paying his …

Donating Rental Expense to my pastor 
Can I provide housing to my pastor in a home I am still paying the mortgage on, but it is not my primary residence. Would I first donate the payment …

Self employement tax 
If housing allowance is exempt from tax and one can opt out of Social Security, why does the minister pay self employment tax? I read on post that the …

Housing Allowance - Shared Residence 
If two ministers' families qualify and purchase a home together, live together and share housing expenses, would both ministers be eligible for a housing …

What's our next step? 
We became part-time pastor of a small, struggling church two years ago. It was agreed at the time that we would not receive a monetary salary until the …

Click here to write your own.

Housing allowance PLUS parsonage 
Our pastor is living in a church supplied parsonage but just bought a home. He will not move into the home for another month. Can he receive a housing …

New church parsonage allowance 
The Treasury regulations 1.107-(1)(b) require that a housing allowance be established in the prior tax year. For a new church (and a new minister hire) …

Living in the Church Parsonage 
When a pastor does not want to live in free church parsonage, can the assistant pastor or other church member live in church parsonage for free?

Approved 4361 exempt from paying all income taxes? 
Does an approved 4361 mean that a minister pays no income taxes at all? If so, is there any reason to designate a housing allowance?

Can housing allowance be retroactive 
My husband was an interim lead pastor 2013-2014. We really did not think of housing allowance as this was the first time he was an Interim Pastor. …

Church's liability for stating housing allowance correctly 
What are the consequences if a church gives a pastor housing allowance that they shouldn't have? Does the burden fall on the pastor or the church? Thanks. …

housing allowance guidlines 
Our Pastor just retired after many years of service with us. About 20 years ago they purchased the parsonage from the church. Then he received a what I …

Tax Responsibilities with a Parsonage 
Our church is considering bringing on an Associate Pastor whose only compensation would be a parsonage. For tax purposes, he is licensed. My understanding …

Can a personal loan for house count as HA 
My in laws have offered to give us the money for a house as a personal loan. They wanted to offer this to us as an interest free loan that we would pay …

Ordanation needed to have a housing allowance 
We have a young man who has just entered into a full-time ministry with the church but is not ordained, with no plans to become ordained. Is he still …

Pastor living in parsonage yet owns home in another state 
As a new pastor fresh out of seminary, this is all confusing to me. If I am living in the parsonage provided by the church and own a home in another state …

Tax on clergy housing allowance in retirement 
Our denomination's pension plan pays out our pension as housing allowance. In PA, housing allowance is taxable prior to retirement. Is it also taxable …

Ordained and transitioning from role of pastor to work for a non-profit 
I am soon to leave my position of pastor at a church, to take a position with a non-religious non-profit org. If my new position is deemed to be a "validated …

Pastor moving out of parsonage, should I get a raise? 
I work as a full time children's pastor at a church, and when I was offered the job, a parsonage and all housing expenses was part of the compensation …

Retiree Housing Allowance 
As a retired pastor can I claim any portion of my housing expenses as an allowance for Federal Taxes?

Reporting Housing Allowance on #941 
Does Church report a ordained minister's housing allowance on its #941? HELP!!Our Minister of Music is an ordained minister. His part-time employment …

The non profit approved a Housing allowance for me last year of 4,500 
I am ordained minister and was given housing allowance last year approve by the board for 4,500. However by accident they filed in as a 1099 misc. When …

W2 has nothing in box 14 and the IRS accepted my opt out, do I still have to report my housing allowance? 
My son-in-law is a minister that's been approved for opting out by the IRS. As the preparer of their taxes, I want to make sure I understand how to correctly …

Do you have to take the Housing Allowance if it was designated by the board? 
My question is do you have to take the housing allowance designated by your church board? My Husband is a pastor and we have 9 children so our standard …

How to report pastors w2 to the IRS 
As the secretary of the church. I filled out the pastors w2 online and electronically sent/filed it with the SSA. Do I need to do anything else with …

Self-employed missionary's clergy housing allowance from a source other than primary missionary agency 
Question about self-employed missionary's clergy housing allowance from a source other than primary missionary agency I am a self-employed missionary …

Must be considered self employed to have housing allowance? 
My husband is an ordained youth pastor. We have never needed to take advantage of the housing allowance because we always receive more than we paid at …

Missionary returning home 
We had a missionary returning home to leave the mission field. We had an old house that had not been lived in for 10 years and allowed him to live there …

Two Pastors Who Are Married.  
What happens with the pastor housing allowance when two pastors are married and live in the same house? I am thinking of a case where the husband is the …

Part-Time youth pastor as contract labor or HA? 
My husband is a part-time youth pastor that is paid twice a month as 'contract labor'. Another pastor told us that it would be more beneficial for him …

Click here to write your own.

Why must I put something in box 1 
On turbo tax it says I have to aleast report a dollar even tho my w2 only has amounts in box 14?

Part time Pastor is only paid housing allowance. 
Pastor is only paid housing allowance as he is only part time. The parsonage needed repairs, which he agreed to repair. The church agreed on the housing …

Deferred Housing Allowance 
Can a church board establish an account for a pastor where a portion of his salary is placed in an investment account, under a written agreement between …

what if you have work 2 pastorates  
What if you worked 2 pastorates this year. One was from January to July where we rented a home and the other is from August-December and we had a manse. …

minister paid hourly with HA 
We have 3 licensed ministers who are eligible and have been approved for a housing allowance. However, their approved HA amount actually exceeds their …

Does a laptop computer purchase qualify as Housing Allowance? 
I purchased a laptop computer primarily for use in my home. Does the money I spent on the laptop qualify to be counted as housing allowance?

W-2 box 1, housing allowance? 
I handle payroll for our church, our last CPA reduced box 1 of the W-2 by the housing allowance amount and listed it in box 14. I moved over to intuit …

pastor chooses not to live in parsonage but wants an allowance for other home? 
Our pastor wants to move out of the parsonage. Do we still have to give him a housing allowance since the parsonage is available?

Housing Allowance Spread Over Several Years 
I did a major renovation this year. Can I somehow spread the cost over several years?

Can husband and wife both claim ministerial housing allowance 
Husband and wife are both "Called Ministers of Religion". Can they each use the Housing Allowance as a tax consideration for their individual income?

Does a Church Need to Keep records on what the pastor purchased with his housing allowance? 
Our church has recently asked us for an itemized list of what we spend our housing allowance on. The reasoning is they may need this in case they are audited. …

HA and W-2 
To clarify, the church is responsible for designating the Housing allowance; the minister is responsible for tracking the actual expenses and/or the fully …

Deductions After Leaving RO 
I left my duties as Religious Order in April of this year. May I deduct expenses incurred for the remainder of the year against my housing allowance? …

Housing Allowance with No Ministerial Income 
I do not receive a salary or HA from my church. Is there any way I can benefit from the tax advantage of the tax benefit with the amount I pay in rent? …

Renting out a portion of home and housing allowance 
If I am a minister collecting a housing allowance and I rent out a portion of my home to someone else, do I need to subtract the rent I collect from the …

Pastor has declined to provide estimate housing expenses to substantiate housing allowance adjustment 
Should a pastor provide a written estimate of housing expenses to the church when asking for an increase or change in his housing allowance, even if the …

Pastor Package w/ Parsonage & Housing Allowance 
Our church has just created a Finance Board and I have been elected chairman. The finances in our church lack in some areas. We are using an Interim …

Assocaition Definition and Housing Allowances 
I am on the board of a non-profit religious school, which is established as an association of churches. The association nominates members to the board, …

housing allowance for visiting ministers 
Can a church designate a housing allowance for a visiting minister if he visits once a month or more? A retired minister is preaching once a month - sometimes …

Church documentation of housing allowance 
Our pastor wants utilities set up to come out of main church account electronically each month. Is this good to do from documentation standpoint for the …

Proportion of housing allowance vs salary 
Can a minister receive a larger housing allowance than salary if expenses warrant it? Suggestion $8000 housing allowance, $2000 salary per month?

How often should a housing allowance form be updated? 
I'm wondering if there is a need to have the minister update their housing allowance form each year whenever we submit the budget for approval if nothing …

Church employee(director of music) living in church housing 
We have a director of music living in church housing....we have treated it as part of his compensation. He is not a minister and to the best of my knowledge …

Brand New Church Plant With No Money 
I am bi-vocational. I don't accept any monies from the church. If the church cannot afford to pay out any housing allowance or the pastor refuses to receive …

Live in parsonage and take housing allowance on 2nd property 
I live in a parsonage but I am also purchasing a home for retirement. Can my housing allowance from the church cover both?

Click here to write your own.

Is It Ok for My Church to Pay No Salary but Pay Housing Allowance? 
My husband was recently installed as pastor after our current pastor retired. Our current pastor still receives a salary (under church agreement/contract. …

house allowance should it be reported when apply for medicaid 
My husband is a pastor and the church do not provide medical insurance for us a family of 4, his salary is 1500 a month. He also get a house allowance …

Mission House 
If a non-clergy employee of a church stays longer than 12 months in a mission house, will this benefit be considered income for the employee?

First Time Daycare provider living in Parsonage 
My husband is an Associate Pastor and we are currently living in a parsonage. I have been providing daycare for a family. They have not withheld taxes …

Retired at 48 from company then hired into full-time ministry. 
I retired from a company at 48 then went into full time ministry. My question is since my church pays me a HA, and I draw a pension from this company, …

Is it ok for my church to pay no salary for a part-time minister but provide $2400 housing allowance? 
Is it ok for my church to pay no salary for a part-time minister but provide $2400 housing allowance? Is it legal? Will it trigger IRS audit for my church? …

Should the housing allowance be deducted from the amount shown on a 1099? 
One of our pastors is paid on a contract basis. Should the housing allowance be deducted from the amount shown as "other income" in box 3 on the 1099? …

Housing allowance for major repairs 
If a pastor has major repairs on their home, can most of their salary be designated as housing allowance. (They have water coming into their basement and …

reporting income for school voucher program 
Ohio recently passed an income based voucher program allowing families at 200% of the poverty level to opt out of public school and enroll in a private, …

no mortgage 
If my house is paid for, can I deduct a rent amount?

Presbyterian minister's housing allowance 
What is the rule when two Presbyterian ministers are married and serving two different churches - does each church pay a housing/utilities allowance?

Part time ministers 
Can a minister who is employed by a church part time to handle youth activities or other related church activities be granted a housing allowance even …

Pastoral Housing Allowance 
I read the post about the LETTER that the pastor is given to confirm his housing allowance. But the post said that this letter is NOT sent in with the …

% or $ amount on board approve documents 
What should be shown on the board approve document for the housing allowance? Is it by law that the % of the salary for the minister be shown or the actual …

Down payment for house purchase.  
What does the housing allowance for "down payment for house purchase" work? Can a minister who is currently renting designate what they are putting into …

Houssing Allowance Qualifications 
Is an ordained pastor hired by a church to serve as Maintenance/Grounds Supervisor eligible for Housing Allowance ?

Is Housing Allowance good for ministers who do not opt out of Social Security? 
I'm wondering if it's better not to use the housing allowance because I have to pay 12.4 percent social security tax. But if I include it as regular income …

Double housing allowance for the same home. 
We have a husband and wife as pastors in our church. One is Childrens, one is youth. Can we pay both of themj a housing allowance if they are in the same …

Purchases of furniture and appliances for parsonage  
Our church provides a parsonage for the pastor's family and also pays the pastor a housing allowance. If the pastor uses a portion of the housing allowance …

Frequency of change of parsonage allowance 
Are there limitations on how frequent the parsonage allowance can be changed? We increased the amount for our Rabbi when her rent went up in June. She …

can housing allowance increase during the year for remodeling? 
Can the housing allowance be increased during a year where remodeling occurred?

Applying for Social Security Disability. 
Does housing allowance affect this? I am disabled and need to try to get SSI but I do get a housing allowance from our church, but not a salary. Will getting …

unpaid housing allowance due to pastor 
What if the Church was unable to pay the pastor 100% of the (actual amount spent by the pastor, (for housing allowance expenses allowed by the IRS)for …

Can a pastor volunteer to designate part of his taxable salary as non-taxable HA to help rent a more expensive house that than congregation wants to pay for? 
Our pastor rents a home for $2150 per month. We give him a housing allowance of $1500 per month. Can he volunteer to switch $650 from his taxable salary …

Can a housing allowance be cut in the middle of the fiscal year due to budget cut?  
Our budget to our church had to be revised due to bad times and in that budget cut was the part time ministers housing allowance. Can this be done after …

Click here to write your own.

Can we purchase a storage shed with housing allowance money? 
My husband is a pastor and receives a housing allowance. Are we allowed to use that money to pay for a storage shed?

The IRS Test of Qualified Minister v the Supreme Court 
It seems to me that the old IRS test for who qualifies for Clergy exemption with regard to Housing Allowance is now much stricter, and out of touch, with …

Anyone know how to setup a paycheck showing Housing Allowance in Quicken?  
I am using 2013 Quicken Premier. Unfortunately, Intuit/quicken help and forum is no help.

NON- Clergy "Housing Allowance" for Medical Workers in California 
My employer just informed me that to "save on taxes", I will be paid part of my wages under normal W-2 process,(about 2/3rds) and the rest via a SEPARATE …

parsonage deduction from income 
My church does not provide a check or reimbursement for parsonage expenses, rather it provides a pre-approved amount that can be counted as parsonage allowance. …

What should a minister's paycheck look like??? HELP 
I have been a minister for 5 years now and I need some help figuring out how my paychecks should be cut to me. For the first 2 years of being a minister …

Housing allowance and 1099 
Yes, my question is this. I am an elder in a church that helps with the support of a number of men who do not preach for us locally. One of our men …

Is a pastor's housing allowance used as income to calculate child support 
My husband is a Pastor and receives a letter yearly for 20,000 in housing allowance. He does not receive cash in hand for this but my understanding is …

Social Security, House Allowance, w2 or Misc 1099, salary 
I have been the office admin for a couple of years. I started with just taking record of tithes and offering. Pastor had someone doing their 941'S and …

Do part-time ministers classify as clergy for housing allowance? 
How do we decide which of our part-time ministers classify as clergy for housing allowance and which don't given the many hats that they have to wear today? …

What amount do I need to enter on my taxes for housing allowance? 
I am trying to do our taxes this year, and my husband's income is designated as housing allowance. Do I put the gross amount or the amount after federal …

Became a Pastor during the year and received housing allowance. 
I was originally hired as part of the administrative team of our church. During the year, one of our pastors stepped down and I was ordained. Because of …

All Income for Part Time Pastor is Housing Allowance 
All the income for our part time pastor is designated as a housing allowance. What is the best way to report this on a 1099misc? I tried to do a W-2 …

HA now possibly turned income. 
Is a pastor required to pay rent on a parsonage owned by the church? We provide him with 2000 a month HA which was previously used to pay rent at a …

Substantiating actual housing allowance 
In regards to a minister having to substantiate the housing allowance, I have been receiving the allowance check from the ministry, let’s say for 500. …

Can housing allowance be greater than chruch paid income? 
Our Pastor has two income streams; one from the church and one from outside the church. His housing expenses exceed the income from the church. Is he …

Income less than the actual housing costs 
What if my actual clergy income is less than my housing costs?

Housing allowance 
How do you report the income to the Social Security Department?

What Can You Spend Your Housing Allowance On? 
My son is going off to college and I am paying for his rent. Can I use part of my housing allowance to pay for it?

Disallowed Housing Allowance 
Our church had an audit completed last year due to the embezzlement of funds. During the audit, it was discovered that the Pastor had directed the …

Can housing expense go on a 1099? 
Our board approved the max $8000 housing expense for our part time pastor... Last year (her first tax season with us) I did it on her W-2. After tax season, …

Housing allowance plus church pays for mortgage 
Can a church pay a ministry a full housing allowance (i.e., all related expenses, including mortgage), and also make separate payments that cover the pastor's …

Housing Allowance for personal home not parsonage 
We own a home that we will be renting out - the rent may or may not cover the entire mortgage payment. We will be living in a church parsonage. May we …

PARSONAGE UTILITIES 
When I became pastor I commuted back and forth to the church from my home (110 miles 1 way). To be closer to the church we moved into the parsonage and …

Expenses in Patio  
Expenses in Patio putting a patio concrete at our backyard deductible? Appreciate your reply. Pastor Ed Fuentes

Click here to write your own.

Housing allowance for non-paid Elders/Pastors 
Do non-paid Elders/Pastors qualify in any way for housing allowance status?

Correcting previous W-2 that did not have Housing Allowance subtracted from Box 1 
We have discovered that the previous bookkeeper here did not subtract Housing Allowance from the pastors' salaries in Box 1 on their W-2s, and so the pastors …

Is a Minister legally allowed to place all of his income in housing allowance? 
Is there a limit to the percentage of income you place in housing allowance? If your housing expenses are equal are greater than your income, are you …

Housing Allowance approval?? 
Housing Allowance approved for $300.00 a week 1.What goes into minutes the dollar amount or breakdown of the expenses so check can be issued? 2. Is it …

Pre-Approval for Housing Allowance 
What exact provision in the IRS code calls for the governing board of a church to approve, in writing, the housing allowance to be paid to a minister prior …

How do you treat approved housing allowance but the church did not have enough money to pay out? 
If housing allowance was approved by a church for a certain amount but later on the church does not have enouugh to pay that amount, how do you treat the …

Pastor's housing allowance 
If a pastor lives part of the year in one state and part of the year in another, can they take the utilities, maintanence, etc on both homes?

Pastor Parsonage 
What are some of the benefits to the ministry in having a parsonage instead of providing housing allowance?

How do I file my Housing Allowance when I receive a 1099? 
How do I file my Housing Allowance when I receive a 1099? I am using Turbo Tax.

Pastor purchasing his house 
The church includes a housing allowance between 20 - 28% of the pastor's salary? This does comply with IRS regulations, right?

MORTGAGE PAYMENT DIRECTLY TO MORTGAGE COMPANY 
Can a church write a check made payable DIRECTLY to the minister's Mortgage Company?

Eligiblility for Housing Allowance 
My dad is a retired Wesleyan minister. He pastored in a number of churches over the years, but it was not his primary source of employment over his working …

W-2 vs 1099 
I was recently elected to the council of a small church that annually contracts with a retired ordained minister to serve as our pastor. He is 74 and collects …

Do you include a housing allowance when calculating for Earned Income Credit? 
Bottom line...Does an ordained minister have to include his housing allowance when calculating for Earned Income Credit? It seems that even the IRS …

Housing Allowance 
We have a small non-profit incorporated church/ministry & I am a licenced & ordained minister. Our board designated a housing allowance years ago …

Do I pay a SE tax on the total amt rec'd? 
The SE tax that we will be required to pay, will that be like 15% of the total amount rec'd for housing regardless of the monies spent on housing? vickey's

Record keeping requirement for the church on minister housing allowance 
What details are required for the church to keep as ministers' housing allowances? What are the required details or evidence that the church needs to …

Bivocational Minister's income exceeds Social Security Maximum Amount 
Is a Minister, whose secular income exceeds the Social Security Maximum amount required to pay Social Security Tax and thus at some point he stops paying …

Do i include the amount that the church pays on rent as goss income or salary? 
Ok, the Church has agreed to pay me $44,000 salary per year. But they are going to actually write the checks for the rent which will total $8,400.00. …

Renting out personal dwelling property and housing allowance filing? 
I have the housing allowance, but I also rent out rooms from my house. How should I file? Vickey's reply I am not sure. I believe you would …

Taxes for Housing Allowance 
I want to make sure I am understanding this correctly. Our pastor is going to get $1000/month in housing allowance. With his approval on the w-4, we can …

Filing Married for the first time and calculating housing expenses 
My husband and I were just married in May. When I calculate housing expenses for the year if we are filing jointly, can I add both of our housing expenses …

Housing Allowance Eligibility 
My uncle has a house church which is a official religious organization. Are housing allowances only for churches with a payroll? We are trying to be able …

Is Housing Allowance a Payment or a Credit? 
Is a housing allowance something actually paid by the church to the minister and then credited to your taxes, or is it simply an amount you get to take …

How is Housing Allowance Reported on Form 941? 
How and on what line is housing allowance reported on Form 941? Also is this amount reported on Line 2 on Form 941? Know the answer? Face the same

Click here to write your own.

Housing allowance while living over seas temporarily 
I am licensed and ordained and received housing allowance for the past 6 years. In 2009, my family moved to Chile for the months Sept. to Dec. for ministry …

Refinance expenses count toward housing allowance? 
How do I determine from re-fi settlement statement the amount to count toward my "actual expenses" with regard to my housing allowance? vickey's

Can Entire Salary be Tagged as Housing Allowance? 
Have a part time minister that receives a monthly stipend - can he allocated the entire dollars received as housing allowance? (Please use the "comment" …

Housing Allowance and Schedule A Double Dip 
If mortgage interest and real estate taxes are deducted on Schedule A, is it also ok to include those same amounts in the housing allowance that is excluded …

Does the HA have to be a direct expense of the church? 
I have read where the HA does not have to be an actual expense for the church. Like, if it is a small church that is unable to compensate with a salary, …

Need to File a 941 If Only Paying a Housing Allowance? 
Our small church only has one employee and his total compensation is designated for "housing allowance". Does the church need to file a Form 941 to report …

drawing my social secutity 
when i sign up for social security does my parsonage allowance count toward my income Answer Anything you pay self-employment tax on such …

Reporting a Housing Allowance  
I receive all my salary in HA. I do not get a W2. How do I report that to the IRS? vickey's reply If you are an employee of your church, …

How do I write a housing allowance letter for tax purpose. 
I am the bookkeeper for our church. I need to write a letter stating that our ministers are receiving housing allowance. How do I start this letter and …

Housing Allowance 
No one really knows this answer. We outsource our payroll and the accounting firm has no idea. Our church employs 3 part-time ordained associate pastors. …

HOUSING ALLOWANCE FORM 
I pastor a very small church that pays me a small salary, but they cannot pay for my Housing Allowance.I have paid for my own Home. My former taxpreparer …

Housing allowance for a home and a parsonage 
We own a home where we lived when my husband was at our former church. He was moved to another town to a church with a parsonage. Spouse is at the former …

How does Housing allowance affect a minister who is exempt from SS  
As a pastor who is exempt from paying social security, having filed and received approval from the government how does this affect housing allowances?

Housing Allowance while on SDI 
My husband has brain cancer and wants to go on temporary disability. Is he eligible if he continues to receive a housing allowance of $2,040.00 per …

temporary housing 
I am a minister and changed jobs 7 months ago which required a move to another city. I own my own home with a mortgage and maintain utilities at that town. …

Can the church contribute a percentage of the ministers HA towards his retirement account (403B)? 
I sit on the Board of our church and also Treasurer. In our ministers contract, it says that he receives 10% of his regular pay plus 10% of his HA by the …

Housing Allowence When Switching Ministry Jobs Mid-Year 
I am an ordained minister who currently receives housing allowance at my job. I will be transitioning to another ministry job mid year. How does housing …

Is a Minister's Housing Allowance Subject to California State Disability? 
In California should I pay Calfornia State Disability on the amount of money I take on my housing allowance? This information does not seem to be available …

posting housing allowance to general ledgerr 
the Debit side is to Housing Expense the Credit side should be listed how? and should this be allotted monthly or can evangelist salary be adjusted at …

Housing Allowance Only W-2 Needed? 
I am in charge of the accounting and finances for a very small church plant. If we have properly designated an amount to be paid to our pastor as Housing …

Housing question transitioning from called part of the year to receiving housing equity money... 
If one has a housing allowance of $21000 for the year and ends the call in April and at the same time withdraws housing equity funds from church sponsored …

Can a non exempt minister receive housing allowance? 
Many church starters are part time because their church is too small to support them. Consequently, they work another, mostly secular type job. Can they …

housing allowance pastor treated as employee 
a couple questions is housing allowance taxable for FWT ? for FICA ? for state of PA? also how is it reported on w2 salary of 50,000 housing …

2nd home housing allowance 
I'm seeing that "recent legislation" restricts the housing allowance to the home occupied primarily for purposes of ministry. I don't see that legislation. …

We have an ordained minister that is our minister of music.  
The minister of music only does the music for our church. This was all supported in documentation before he was hired that his payment would all go to …

Click here to write your own.

Housing allowance during leave? 
My wife is clergy at a congregation that provides her with a housing allowance. we have purchased a house and deduct the mortgage etc. as a parsonage …

Housing allowance for constructing a home 
Can the housing allowance be used for the cost of constructing a home and still be granted favorable tax treatment?

part-time 
Are part-time ministers eligible for parsonage allowance?

Does our Vacancy part- time pastor claim income for free rental apt.  
We provide a salary for our vacancy pastor who works for our church only 8 days per month. However, our church provides a place for him to live rent free …

Renting Below Fair Market Value 
The landlord is renting a home to a pastor, openly acknowledges that the amount charged is below fair market value, and reports the rental as such on their …

Payroll Set up if Housing 
I am pretty new to all of the payroll taxes and laws. If we are only paying our pastor a housing allowance, do we still need to set up all of the payroll …

Will a housing allowance effectively increase my income? 
I am wondering if receiving a housing allowance will effectively increase my income due to that portion of that income not being taxed federally. Wouldn't …

Housing Allowance for Home with No Mortgage 
Our Pastor's mortgage is paid in full. How does this factor in with the housing allowance? Can only housing expenses such as utilities, appliances, etc. …

Housing Allowance less than house rent 
I am a pastor and the board of the church of which I am also an incorporator and president agreed to give me a housing allowance. All the amounts I receive …

Housing Allowance on W-2 
Our pastor has a salary of $42000. $1200 is set as Housing Allowance. The $1200 goes into Box 14? Does $42000 go in box 1 or would it be $30,000. Vickey's …

Is my housing allowance exempt from the SE tax, in MY situation 
I currently serve as a part-time pastor of a Baptist church, and it has given me part of my salary as a housing allowance deduction (only from FICA wages, …

Part time pastor & housing allowance 
My husband will be working 15 hours per week (ordained minister). Can he use all of his pay toward housing allowance (his monthly pay will be less than …

Do I include Housing Allowance in Hourly Rate Calculation of Unpaid PTO Hours 
Our pastor is leaving. He has unpaid PTO days. The compensation package comprises two elements: a salary amount and a housing allowance amount. When …

Splitting the Compensation package between housing and salary 
Our church is relatively small and therefore can't pay our pastors properly. Lower than the 25% range for pastors in our area. It was determined our …

Housing Allowance for Nonpaid Ministers 
Is a housing allowance available to nonpaid ministers? vickey's reply No. It is an exclusion of a portion of a minister’s compensation package …

Unreimbursed Expenses and Housing Allowance Statement 
I am preparing my taxes with H&R Block tax software. I am ready to file and I am instructed to write a statement about ministerial income, housing allowance, …

Can you deduct Parsonage Related Expenses 
I live in a church parsonage, but do not receive an allowance for utilities/expenses. I report the fair market rental value on form SE. Can I deduct the …

Social Security tax on Housing Allowance 
Does the church pay 1/2 of the social security tax and the mnister pay 1/2 on housing allowance or does the minister have to pay the entire amount? …

Housing allowance reported in W-2 box 14 but not actually received 
I have received from my church W-2 form that includes HA in box 14 as others. But the total amount in box 14 was not received. For example, church …

Is the housing allowance taxable income for state taxes? 
Is the housing allowance taxable income for state tax purposes? thank you! Answer Generally, housing allowance payments are exempt from most …

Box 14 Housing Allowance 
Thank you so much for being there for many small church office secretaries and support staff. This is our situation. We had an assoc. pastor leave part …

How Do I Report a Housing Allowance if No Income is Received 
A clergy member who does not receive income just has the housing allowance needs to report additional expenses as well as depreciation for the church van …

Do I write 2 separate checks one for the housing allowance and one for the pastor's salary? 
We are writing 2 separate checks to our pastor. One is a payroll check for his salary and the other is out of our payables for the housing allowance. …

What to Report on Schedule SE 
I receive about 80% of my income as housing allowance, which isn't taxed by my church. The other 20% is taxed. Do I just report my housing allowance …

W-2 and H/A 
How can correction be made to the W-2 once the treasurer has sent them in? The Total in box 1 was inclusive with the housing allowance and also listed …

Click here to write your own.

Should total wages reported on w-2 box 1 include housing allowance? 
In box 1 of my w-2 the church reported my total wages to include my housing allowance. I am a full time pastor. I thought box one should only report wages …

Part Time Clergy and a Housing Allowance 
Are part time Clergy eligible for housing allowance? Answer I am not sure what you mean by part-time. If you are a pastor of a church, you …

Taxes on Housing Allowance  
I serve as a certified minister at my local church. My church has been taking our Social Security and Medicare taxes out of my paycheck. My entire …

Housing Allowance and Parsonage 
Housing Allowance and Parsonage, Are they the same? Answer No. A parsonage is simply a place where the minster and his family live. It is …

Reporting Housing Allowance on a W-2 
I am receiving conflicting information regarding reporting a housing allowance on a W-2--how much of our pastor's housing allowance must be reported on …

Click here to write your own.

The comments above are for general information purposes only and do not constitute legal or other professional advice on any subject matter. See full disclaimer.

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