Housing allowance with no church salary

by Keith
(Locust Grove Ga)

I am an ordained Assembly of God pastor of a very small new church. I do not get paid anything from the church. I teach at the local middle school. Can I take a housing allowance equal to my house payments each year?

Vickey's reply:
No. The housing allowance is limited to the LESSER of these 3:

1. The amount actually spent on eligible housing expenses.
2. The fair market rental value plus furnishings and utilities.
3. The amount officially designated in advance and PAID by the church as a housing allowance.

So with nothing paid...there would be nothing to report on the Schedule SE on your personal income tax return.

Note that if the church were able to pay you a housing allowance, those payments or the lesser amount described above...would be exempt from income tax, but not from the Self-Employment (Social Security/Medicare) tax .... unless you have opted out of SS.