Housing Allowance

by Ramona
(Chicago, Il)

I am a Reverend in my church, but not the Pastor.

I meet four of the five separate tests (I only minister occasionally) I do not have any management responsibilities. I get paid $100.00 every other week.

The church administrator said she has to give me a 1099 under housing allowance she reports it as nonemployee compensation.

I am on a government pension this self employment income from the church is causing me to pay out of pocket. I was never instructed what I can claim as expenses. I live in my own condo. Can you give me any advice?

Thank you in advance, God Bless

vickey's reply

A housing allowance is not recorded anywhere on a 1099 as it is a fringe benefit for ministers who are employees (compensation reported on a W-2) of the church and considered eligible by meeting all five of the IRS's tests.

I would be a little concerned about being paid as a non-employee though. It sounds to me as if you would be classified as an employee of the church. I would research state and federal labor laws on who is considered an employee and who is not.

If it is determined that you are indeed an employee then the church would withhold appropriate taxes (FICA) as you do not meet all 5 tests to be considered to have a dual-status by the IRS.

However, you would also not qualify for a housing allowance and all compensation would need to be reported on a W-2 or 1099 (whichever) is appropriate.

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