Housing Allowance Eligibility

by Maryrose
(Chicago, IL)

My uncle has a house church which is a official religious organization. Are housing allowances only for churches with a payroll? We are trying to be able to write his house off as a parsonage. Any suggestions?

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Comments for Housing Allowance Eligibility

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Sep 06, 2010

What is a housing allowance?
by: Vickey

You need to consult a tax professional regarding writing his house off as a parsonage. I do not believe you could do this as a parsonage is usually a separate building from the church that the church owns and provides as housing to its minister.

A housing allowance is a tax benefit available to qualifying ministers. Section 107 of the Internal Revenue Code allows ministers to exclude some or all of their [ministerial income designated by their church] as a housing allowance from income for federal income tax purposes. However, you do have to pay SECA taxes on the allowance.

So if the church has not designated a housing allowance there would not be anything to exclude from their ministry-related income.

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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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