Reporting a Housing Allowance

by Bruce
(Huntsville, AL)

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, then you should receive a W-2 even if all compensation is recorded as a housing allowance in box 14...or some churches just report their employee minister’s housing allowance in an appropriate letter. Either way, you would then report your qualifying housing allowance on a Schedule SE.

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Comments for Reporting a Housing Allowance

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Self Employed Ministers Claiming Housing Allowances
by: Vickey

I came to my conclusion from these two sources:

IRS Tax Topic 417 states:

The minister's employing organization must officially designate the allowance as a housing allowance before paying it to the minister.

IRS Pub 517:

The church or organization that employs you must officially designate the payment as a housing allowance before the payment is made. ....

Note: Most Pastors are considered employees of their churches by the IRS. That doesn't mean you can't have additional income from speaking at other churches or other "outside" activities. You could report that additional income as independent contractors, but you would not usually have a housing allowance designated (Exception: see housing allowances for evangelists) from those outside sources.

Pastor CAN be considered self-employed
by: A. Smith

Vickie,

Thank you for your helpful site. It has been a real help to me. However, I was confused by your comment that pastor's can not claim a housing allowance if they are considered self-employed (independent contractors) by the church they serve.

This is not true.

We have two pastors our church pays a housing allowance to, myself and our senior pastor. We are also considered evangelists as we speak at other engagements as well, and conduct church planting efforts in other towns. The IRS therefore considers us independent contractors per their web site Tax Topic 417 (http://www.irs.gov/taxtopics/tc417.html).

I hope that this is a help to you and others who are in our same situation.

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