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Do part-time ministers classify as clergy for housing allowance?

by sufferthechild
(Northern California)

How do we decide which of our part-time ministers classify as clergy for housing allowance and which don't given the many hats that they have to wear today?

Like many churches these days, we have cut our staff down to 3, a full-time pastor and 2 half-time ministers, all of whom attended seminary and all three are ordained.

The pastor is ordained within our church tradition and is in charge of all pastoral concerns and Sunday liturgy and oversees the other staff.

The part-time graduate student/minister of education and family, is ordained in a different tradition but ministers here and shares in Sunday liturgy prep and worship, but has no other responsibilities.

The part-time business administrator (brought in to restructure our administrative operations -facilities, main office, purchasing, leases and rentals- and turn our losses in this area into a surplus that now provides 65% of our annual operating budget)is also ordained in a different tradition and does not participate in our Sunday worship because he spends Sundays volunteering at a small "house church" of his own denomination, however he is fully in charge of our wedding ministry -- from the scheduling to the pre-marital counseling and officiating at the marriages -- and is on the rotation to preside several times a year at our local nursing home services.

My question is whether the 2 part-time ministers qualify for housing allowances from our church even though neither is exactly the traditional minister described in the IRS letter?

Comments for Do part-time ministers classify as clergy for housing allowance?

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Feb 27, 2013
 part time employee
by: Sandi

Vicki has this info if you look to your left and scroll down to clergy/minister. She also has a lot of good info on how to set up the housing allowance and many other areas that we all need to know :-)
The actual preacher should qualify if you followed the IRS rules (the main one is the church has to offer this prior to it being used-not at the end of the year-there are other rules also)
You might want to go to irs.gov site and review the pub 15 series. I have copied a small part of it here...
Pub 15A
"Ministers are individuals who are duly ordained, commissioned, or licensed by a religious body constituting a church or church denomination. They are given the authority to conduct religious worship, perform sacerdotal functions, and administer ordinances and sacraments according to the prescribed tenets and practices of that religious organization.

Ministers are employees if they perform services in the exercise of ministry and are subject to your will and control. The common-law rules discussed in section 1 and section 2 should be applied to determine whether a minister is your employee or is self-employed. Whether the minister is an employee or self-employed, the earnings of a minister are not subject to federal income, social security, and Medicare tax withholding. However, even if the minister is a common law employee, the earnings as reported on the minister's Form 1040 are subject to self-employment tax and federal income tax. You do not withhold these taxes from wages earned by a minister, but if the minister is your employee, you may agree with the minister to voluntarily withhold tax to cover the minister's liability for self-employment tax and federal income tax. For more information, see Publication 517."
Apr 26, 2013
 STILL UNCLEAR...
by: Anonymous

Thank you for that long response, however it doesn't clarify the issue for me.

Both part-time staff fulfill MOST of the IRS list of requirements in some capacity or other, even if not exactly in the old traditional manner - for example, the administrator preaches and presides at worship - but weddings only for us, and elsewhere on Sundays.

It would help if we could get some examples of other churches where a similar situation has either led to a Housing Allowance, or been decided against... and why.

Thanks to everyone taking time to help us out, and help our staff, who, frankly, given the times, need all the help they can get!

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Join in and write your own page! It's easy to do. How? Simply click here to return to Housing Allowance.

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