MUST HAVE REFERENCE GUIDE

Site Map or Site Search

CHURCH ACCOUNTING PACKAGE

HA for Youth Pastor approved after the fact...

Our new Youth Pastor's housing allowance didn't make it in the budget approval prior to the new year, however, we did call a special meeting in January and it was approved.

My problem is that when he was hired in October, I set him up with a housing allowance. He's already filed his taxes for this year and I'm at a loss as to how to fix this without creating havoc everywhere.

Comments for HA for Youth Pastor approved after the fact...

Click here to add your own comments

Feb 27, 2018
 Budget Amendment
by: SCCUMC

If you are concerned how to adjust the budget it is done with a budget amendment that should list out the following:

1. List out the reason for the amendment
2. List out the Accounts to be affected.
3. Schedule out the Amounts to be adjusted
4. Schedule a place for the Signature(s) of
your church's governing body (Trustees,
Finance Committee, etc).

Present the amendment to the governing body, answer all questions and call for a ratification of the amendment. If it amendment is approved and signature affixed to the amendment, make the modification.
Jun 12, 2019
 Designating HA
by: SomeDeacon

My church has had similar cases to the question.

You cannot "fix", change, or add a Housing Allowance (HA) after the income is received.

My interpretation of the IRS law is that the HA amount must be officially designated before the payment is made. That designation does not need to occur at the beginning of the year as my church once assumed. It can happen at any point prior to the payment for which the designation applies. Again, my interpretation is that the church could choose to amend the HA by making a new designation later in the year which would then apply to subsequent payments only. We had this case when promoting a pastor from part-time to full-time.

If a pastor was hired mid-year or for some other reason a HA designation was not made, then a designation could still be made which would affect all remaining income. It is a bit more trouble for preparing the W-2 form and also the pastor doing their taxes, but the benefit in tax savings should be worth the effort.

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.