What are the IRS reporting requirements?
by Donna Campbell
(Reno, NV, USA)
I've been a treasurer/bookkeeper for a number of very small churches and in several of them I have let the pastor (church voted on it) choose to designate all of his salary toward his housing. It has never been more than $1,000 a month. I have been confused about how to report this. Years ago, the housing allowance was not required to be shown on the W-2 but in the last 10 years or so I have been reporting it in the Other (box 14). But what about the 941...there is no place to put that information and do you still have to do a W-3? Can you just give the pastor a letter from the church of the amount of housing allowance paid for him to use on his tax return?
I'd appreciate further explanation to the reporting requirements. I do agree with your assessment of the housing allowance issue and was glad to hear it because I have been doing it for years. In looking at the IRS rules, I don't know where they are coming up with the "no more than 1/2 of the salary." I just don't see it.
Thank you for your research and sharing with those of us who do not have CPA degrees.