housing allowance for visiting ministers

by Donald Fry
(New Jersey)

Can a church designate a housing allowance for a visiting minister if he visits once a month or more? A retired minister is preaching once a month - sometimes more - as pulpit supply for our church.

Can any of his compensation be designated as housing allowance if he is not considered employed by the church, and does not use the church parsonage at all?

Comments for housing allowance for visiting ministers

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Aug 05, 2014

Housing allowance for visiting ministers??
by: Lewis in NC

No, visiting ministers would not qualify for a housing allowance because they are not considered employees of the church who fulfill ALL the following five test that are necessary to qualify:

•Be licensed or ordained
•Administer the sacraments of the church (weddings, funerals, baptisms, and communion, etc...)
•Be considered a religious leader by the church
•Conduct religious worship
•Have management responsibilities in the church

Aug 07, 2014

Housing Allowance for Evangelists
by: Vickey

I would have answered the same as Lewis just a couple of months ago, but I ran across an article in Dan Busby's book: Minister's Tax & Financial Guide regarding housing allowances for evangelists and I bookmarked it:)

In the article, Dan stated that traveling evangelist may treat a portion of an honorarium received as an excludable housing allowance to the extent that the paying church designates all or a portion of the honorarium as a housing allowance in advance of payment.

Those evangelists should also have a permanent home and a local church where they conduct religious meetings.

Most important point to remember is that same as housing allowances for your home minister...the designation must be made in advance.

Remember that churches are required to issue a 1099-MISC to guest speakers and evangelists for payments of $600 or more in a calendar year.

The $600 reporting threshold is after excluding any properly designated housing allowances and net of expense reimbursements based on adequate substantiation.

Please remember that when filing the 1099 form, the taxable amount listed in box 7 would be the total amount paid less the amount designated as a housing allowance. There is no place on a 1099 for housing allowance payments!

Note: Even though the amount paid as the housing allowance should not be reported on the 1099 form, your church should provide a separate letter to the evangelist that identifies the amount of the housing allowance not included on the 1099.

Regarding the second question about the retired minister that is NOT an employee of your church ... you may want to consider consulting a tax professional to learn the most tax beneficial way to set up his compensation and not hinder his retirement benefits.

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