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?

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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
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:

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.

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Join in and write your own page! It's easy to do. How? Simply click here to return to Minister's W-2.

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 =)

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