HOUSING ALLOWANCE FORM

by Patsy N. Collins
(Round O, S.C, U.S.A.)

I pastor a very small church that pays me a small salary, but they cannot pay for my Housing Allowance.I have paid for my own Home. My former taxpreparer has quit and now I cannot find one who knows how to file my housing allowance. My former preparer did it without a I.R.S. form , but now I am told I must have a certain kind of form. Can you help me with an answer?
God Bless.

Know the answer? Face the same situation? Please post your answer or comment by using the "comment" link below. Thank you!

Comments for HOUSING ALLOWANCE FORM

Click here to add your own comments

Aug 03, 2010
Claiming a Housing Allowance Exclusion
by: Vickey

You claim your housing allowance exclusion on an IRS Schedule SE.
However, I am not sure I understand your question. If your church did not designate and pay a housing allowance, you will not be able to claim the exclusion for a housing allowance on a Schedule SE.

Aug 05, 2010
Housing Allowance
by: Patsy Collins

Thank You, Vickey, for your comment.My church is not large enough to supply a parsonage, nor to pay a Housing Allowance. I understand if the church pays the Pastor a Housing Allowance, there can be no deduction, but if not, then the Pastor can deduct what they have to pay for Housing. That has been my experience with Income tax in the past.

Aug 08, 2010
Housing Allowance Part of Salary Package
by: Vickey

Without housing allowance payments from a church, a minister would not have any compensation to claim a housing allowance exclusion from.

So be aware that a housing allowance is usually part of your salary package.

To be able to claim the exclusion, the housing allowance should be included in a board approved resolution and properly documented in the church records.

According to the IRS, if you are a minister and receive as part of your salary (for services as a minister) an amount officially designated as a rental allowance, you can exclude from gross income the amount that is used to provide or rent a home.

The exclusion is limited to the lesser of the fair market rental value of the home (including furnishing, utilities, garage, etc.) the amount officially designated (in advance of payment) as a rental or housing allowance, or the actual amount used to provide a home, and cannot exceed what is reasonable pay for your services.

For more details, read IRS's Pub 517.


Feb 12, 2018
need help also
by: Anonymous

Hi, my husband is a pastor of a small church (since June 2016) that can only pay a housing allowance of $600 monthly and not a salary. The allowance did not cover the full housing cost but was all they afford to pay. Last year, given that it was the first year that we had to report income, we did so using a 1099=misc with the amount in box 1 (salary, wages, etc). We ended up paying almost half of the allowance in taxes in installments. Where did we go wrong with how we reported it and what forms do we need to have.

Feb 15, 2018
Housing Allowance NOT Reported on 1099
by: Vickey

A housing allowance is NOT reported on a 1099.

Your church should have provided you with a letter similar to the one I outlined on this post:

https://www.freechurchaccounting.com/how-do-i-write-a-housing-allowance-letter-for-tax-purpose.html

...to report compensation that is ALL housing allowance.

Please consult a knowledgeable tax professional for advice on what to do regarding your situation.

I can recommend Raymond Wallace. His contact information is at the bottom of this article he wrote for my readers:

https://www.freechurchaccounting.com/fair-rental-value.html

Jan 23, 2019
Do We File a W2 and a 1099?
by: Anonymous

We have bi vocational pastor, who we pay plus he receives $500 a month for Housing Allowance. Do we need to file a W2 and a 1099?

Jan 23, 2019
Do Not Issue a W-2 AND a 1099-MISC
by: Anonymous

A W-2 is used to report "employee" compensation and 1099-MISC are for reporting payments to independent contractors.

Most ministers and Pastors are considered employees of the church, so you would report their compensation on a W-2..with the salary reported in Box 1 and NOTHING in boxes 3,4,5, and 6.

The total housing allowance payments can be reported in Box 14 which is simply an informational box for the employee.

Housing allowance payments are NEVER reported on a 1099-MISC

Jan 11, 2021
Housing allowance
by: Anonymous

Hello I was just brought on as a pastor of a small church and they pay me a housing allowance of $2,000 a month this is my whole salary no other payments are given to me do I need to claim this income on my taxes I also have a secular job which I file taxes with W2.

Jan 11, 2021
Reporting Housing Allowance
by: Vickey

Your church should give you either a letter in Jan of each year telling you how much was paid to you for the prior year in housing allowance payments OR issue you a W-2 with the housing allowance reported in Box 14th. Remember that love and appreciation offerings should be reported in Box 1.

Then you will take that amount and report it on a SCH SE in your personal income tax return.

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 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.