compenstation

by Rena' Patterson
(Birmingham, AL USA)

is it mandatory or mandated by law that the Pastor be issued a w-2 for his compensation? can a Pastor request to receive his compensation as a Housing allowance only, and can prove the his housing expenses do add up to that dollar amount?

Comments for compenstation

Click here to add your own comments

Feb 13, 2011
 Housing Allowance as compensation
by: Pete

Because Housing Allowance is a benefit and not subject to federal income tax, using it as compensation alone is a no no and the IRS will not be very happy.

It is subject to Social Security however.
Feb 13, 2011
 Compensation
by: Rena'

I am aware that HA is subject to SS taxes, however, the Pastor has elected not to be paid a salary (help w/finances at the church)just a HA. His wkly allowance is less than $1,000 which will actually help w/his housing expenses. Can he receive a HA and not be a W-2 if he requested it?

Does he have to be paid a salary and a HA?
Feb 07, 2013
 100 Percent Housing Allowance
by: Vickey

That gets really complicated.

See the bottom question on this article:
http://www.mmbb.org/retirement-benefits-services/housing-allowance-advantage-with-mmbb/housing-allowance-faqs/

I personally believe it would save confusion later to just go ahead and issue him a W-2 with zeros in the appropriate boxes and the housing allowance reported in Box 14.

But I do want to caution you and your Pastor that if he doesn't have another source of income for all of his other expenses, it will as Pete stated throw up a red flag with the IRS.

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 Minister's W-2.



Need training on how to use QBO or Aplos effectively for a church or better yet ...need an expert in either of those accounting software to do your monthly bookkeeping and/or payroll? See more on our accounting services!

Contact Me!