Housing allowance during leave?
My wife is clergy at a congregation that provides her with a housing allowance. we have purchased a house and deduct the mortgage etc. as a parsonage allowance.
Her contract is up in six months and she will be leaving at that time. Because of her congregation has other full-time clergy, it is not absolutely essential that she stay until the end of her contract. She is in discussion with the board about some sort of a buyout that would allow her to leave earlier and also save them some money. Specifically, they are looking at several options:
option 1. She leaves the job before her contract is up and received a cash payment for 50% of what she would've earned from that point until the end of her contract. The major problem with this Is that if the house has not sold by the time she leaves, she loses the parsonage allowance in the house becomes a very expensive liability until it sells.
Option 2. She remains officially an employee until the end of her contract. However, towards the end of her contract she takes a paid leave where she is paid 50% of the regular salary. Our hope is that by structuring things this way she would remain officially an employee and therefore maintain her parsonage allowance until the end of her contract.
Is option 2 allowed? Can clergy maintain their parsonage allowance while on leave? Does it matter if they are coming back to the congregation after the leave ends?
Click here to post comments
Join in and write your own page! It's easy to do. How? Simply click here to return to Housing Allowance.
Need training on how to use QBO or Aplos effectively for a church or better yet ...need an expert in either of those accounting software to do your monthly bookkeeping and/or payroll? See more on our accounting services!