Does HA have to begin before start of new fiscal year

by John
(Houston, TX)

We have decided to ask for the housing allowance from our church employer but now it is almost March. Can we start the HA now and just pay the full taxes for Jan/Feb?

Comments for Does HA have to begin before start of new fiscal year

Click here to add your own comments

Feb 22, 2017
More information is needed
by: Bill OConnell

Your question does not provide enough information to provide an informed answer. Housing Allowances are not simply "asked for". There is a simple, but formal approval process that is needed. Where are you in that process?

Wisdom Over Wealth provides a complimentary consultation that would be worthwhile for you to take advantage of.


Jun 12, 2019
Later designation of housing allowance.
by: SomeDeacon

The IRS Pub 517 requires only that the housing allowance be officially designated prior to the income. So I believe that yes your church could choose to officially designate a new or changed housing allowance at any point during the year which would then apply to all subsequent payments that year.

The church’s W-2 form income calculation and the pastors taxes may be a bit trickier, but the tax savings should be worth the effort. Designating correctly at start of year or start of employment is best, but there’s no legal reason why churches cannot fix or adjust the HA later in the year—as long as the new designation is officially recorded and it is not applied retroactively on previous payments.

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 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 =)

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.