Housing Allowance Change in July

Our church has semi-annual business meetings--one in January and one in July. In the July business meeting in 2019, it was recommended that the pastor's housing allowance be increased. The pastor told the members that the increase could not go into effect until January of 2020.

My question--Is the pastor correct? The members feel that the increase should be able to go into effect starting in August 2019 because we have two business meetings per year and therefore should not have to wait until January 2020 for the increase.

In our case, can there be a change to the housing allowance starting August 2019?

Thank you.
Toledo, OH

Comments for Housing Allowance Change in July

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You Can Amend a Housing Allowance at Any Time
by: Vickey

You are correct.

You can amend a housing allowance at any time.

You will need to show the amended amount was approved by the governing body and is reflected in the minutes.

Make sure your Pastor understands that when he does his personal income taxes that his tax preparer or him will have to do a little extra "figuring" =)

The amended housing allowance is NOT retroactive when it comes to the eligible expenses paid.

For example, if his designated housing allowance on Jan 1st was $10,000 and he had spent $12,000 on housing expenses from Jan to July. He cannot "go back" and include the extra $2,000 of expenses when figuring the housing allowance exclusion for the second part of the year(after the amendment).

He or his tax preparer will have to figure the less of the following 3 from Jan to whenever the housing allowance was amended:

1) The amount actually spent on eligible housing expenses
2) The fair market rental value plus furnishings and utilities
3) The amount officially designated in advance and paid by the organization as a housing allowance

...and then figure again for the amended time to the end of the year.

In the example I used above, the $2000 of eligible housing expenses would be lost.

Here is a good article on amending a housing allowances:

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