Housing Allowance: Church vs. Minister

by Glyndon Morris
(Chester, NY)

Is there any legal reason the church cannot designate the salary as 100% housing allowance, so long as the minister, when paying the SE and income taxes only deducts those expenses allowable as housing allowance?

I am NOT a bi-vocational minister. My package is about $50K/yr. My rent and utilities is about $20K. Since I am new not only to the particular apartment I am renting, but to the entire region, I am only guessing as to the utilities. Sadly, due to poor communication and poor understanding of the tax code, my officially designated housing allowance is only $11K. So this year, I am gonna get screwed, having to pay taxes on $9K that will actually be my housing, just not included in the official housing allowance.

So next year, could the church declare that all of my $50K is official housing allowance? Of course, when it comes time to pay taxes, I would only deduct the $20K (or whatever rent+utilities actually turns out to be) and then I would gladly pay taxes on the rest.

I'm sure this is not the spirit of the law, but does it achieve the letter of the law?

Comments for Housing Allowance: Church vs. Minister

Click here to add your own comments

Jan 30, 2015
Housing Allowance: Church vs. Minister. . .
by: Lewis in NC

If one would not be tempted to inflate the actual housing expenses, then this could satisfy the "letter" of the law.

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 Designating 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 =)



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.