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Record keeping requirement for the church on minister housing allowance

by Maggie H
(Los Angeles, CA USA)

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 keep?

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




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Record keeping requirement for the church on minister housing allowance

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Nov 11, 2010
Rating
starstarstarstarstar 		Church Records for a Housing Allowance
by: Vickey

The records the church is required to keep on file is the written resolution approving and designating the housing allowance, any changes or modifications made to the housing allowance, and a record of all housing allowance payments made to the minister.
Jun 07, 2011
Rating
starstarstarstarstar 		Clergy determine housing allowance amount
by: Anonymous

It is not the church but the clergyperson who determines what the housing allowance will be, but the amount must be recorded by the council, etc., before the beginning of the calendar year.

The church has no responsibility for the amount or reporting of the allowance; the pastor must keep track of all expenses related to housing. Valid expenses that do not exceed the amount recorded by the council can be deducted from taxable income on the pastor's tax return. That number will be added back (on the same tax return) to compute Social Security and Medicare liability. A pastor pays the full "employee" portion AND the "employer" portion--twice what most people pay. Some churches also pay the "employer" portion to the pastor, but it is paid and reported as regular income (the pastor pays all taxes on the additional amount).

I once had a personnel review committee say that they were "approving" my increased housing allowance (because my family was buying a new house) and, further, that I would not receive a raise because I was getting an "increase in income" because of a larger tax break. That did not stand, but it was an uncomfortable time to educating laity.

1. The pastor names the amount (because he or she has a realistic idea of what expenses will be). 2. The council records the amount in official documents. 3. The pastor justifies every expense and reports the amount that was spent on housing (not necessarily the amount that was designated) to the IRS in the process of filing the yearly tax return.

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