MUST HAVE REFERENCE GUIDE

Site Map or Site Search

CHURCH ACCOUNTING PACKAGE

941-difference between housing allowance and fair value of parsonage

by Karen
(Algonac, MI)

Last yr the Pastor was part-time and not yet qualified as a licensed pastor, so he got a housing allowance and Fica was taken from his wages which the church paid. The housing allowance was deducted from his gross earnings.

This year he is a licensed minister, and the district removed the housing allowance and added the "fringe benefit" of "parsonage fair value".

My question is: On the quarterly 941 I report the total wages paid, but only figure the Fica based on the earnings of the Office Admin.

So, is the "Parsonage Fair Value" included or excluded from the Total Wages Paid on the 941.

Comments for 941-difference between housing allowance and fair value of parsonage

Click here to add your own comments

Jan 22, 2022
by: Vickey

There are several "issues" that need to be address in your post.

First of all, housing allowance payments are considered "nontaxable" income and NEVER included on a quarterly 941. I am not sure what a "parsonage fair value" is...but if it is income ...is should not be included on the 941.

If you are providing a parsonage for your pastor and you are referring to the "value" of living in the parsonage....that value is not included in the 941 either.

Secondly, if an individual does not qualify to be classified as a minister ... he does not qualify for a housing allowance =( I know it may be too late to do anything about it now...but I want readers to know that a "red flag" to the IRS is a taxpayer that the church withholds FICA AND receives a housing allowance from that same church =(

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.

If you want to DIY your payroll, I highly recommend you look at using Gusto! It is very user friendly and their support is awesome! Plus they know how to set up and maintain payrolls for churches and nonprofit organizations.

Note: I am a "partner" of Gusto, but as I have told you before ... I never recommend anything that we or our clients have not tried and love =)



Share this page:
Enjoy this page? Please pay it forward. Here's how...

Would you prefer to share this page with others by linking to it?

  1. Click on the HTML link code below.
  2. Copy and paste it, adding a note of your own, into your blog, a Web page, forums, a blog comment, your Facebook account, or anywhere that someone would find this page valuable.