Does the HA have to be a direct expense of the church?

by Lisa
(GA)

I have read where the HA does not have to be an actual expense for the church. Like, if it is a small church that is unable to compensate with a salary, the board can establish a HA for him to take advantage of for his compensation as long as it meets all IRS rules. Is this correct?

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Oct 19, 2014

Ministry-Related Income Exclusion
by: Vickey

Yes, the board can establish a housing allowance for their minister, but it would still be an actual expense for the church and need to be processed through the church records.

If you are asking if the church can designated a HA and not pay their minister anything then the answer would be no. A housing allowance is an [exclusion] from paying income taxes on [ministry-related] income. No ministry income...no housing allowance exclusion.

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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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