Housing Allowance

by Paul Ostrowski
(Tucson, AZ)

Our Pastor had to sign up for A.C.A. (Affordable Care Act) at the beginning of this year.

Is there an issue for the Church to increase the Pastor's Housing Allowance to pay for this health care? (This was put into place by the Churches C.P.A.)

Would this be a legitimate “business” expense?

If it is a problem how can it be fixed?

Thank you, Your answers are most appreciated.

Thank you,

Paul Ostrowski

Comments for Housing Allowance

Average Rating starstarstarstarstar

Click here to add your own comments

Aug 14, 2015
Health Benefits
by: Anonymous

The IRS allows you to contribute funds towards the purchase of health benefits on the exchange as long as you do not dictate their use. We modified the language in the policy and budget to read 'Negotiated Benefits', set a budgeted amount, and the Rector uses the funds to purchase insurance as he chooses.

Jul 08, 2015
Housing allowance and medical insurance premiums
by: Anonymous

Section 107 of the Internal Revenue Code permits a
minister of the gospel to exclude from gross income the rental value of a home, to the extent the allowance represents compensation for ministerial services; is used to pay home-related expenses such as utilities, repairs, and furnishings; and does not exceed the fair rental value of the parsonage (furnished, plus utilities).

How would medical insurance premiums be related to the maintenance of a home? The church could (and should, IMO) pay the premiums for health insurance, but it is unrelated to the housing allowance.

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 AR Plan.

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 =)

Share this page:
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.