Do you have to take the Housing Allowance if it was designated by the board?

by Lori
(Janesville, WI)

My question is do you have to take the housing allowance designated by your church board?

My Husband is a pastor and we have 9 children so our standard deduction is nearly $44,000. We only made about $35000. Our board designated us to receive $24,000 in housing allowance and $11,000 in wages on a W2. They did federal withholding of about $2500. My question is can we take the entire amount as wages and not show the housing on the W2.

My husbands salary is so low that for Social Security reasons we would like to show his income being as high as possible and since it will not make a difference to our taxable income can we just take the entire amount as wages? Does this affect any reporting that the church has done through the year? Thanks in advance!

Comments for Do you have to take the Housing Allowance if it was designated by the board?

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Apr 12, 2015
What to do with the housing allowance. . .
by: Lewis in NC

If your clergy salary is $35,000 with a properly approved housing allowance of $24,000 within that salary, then the proper amount that would appear on the W-2 is $11,000 in box 1 for gross income.

When filing your income taxes there would be no tax liability with those high deductions. Also, it is right to add back to the $11,000 your housing allowance of $24,000 when filing your Social Security tax form to calculate your self-employment taxes. Then your withholdings would be applied to your SE tax liability.

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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.

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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