HSA Paid as an Allowance directly to Pastor

by Kimberly

My church pays an HSA as an allowance directly to one of our pastors, rather than into the pastor's HSA.

The pastor then deposits it into an HSA managed by his bank.

Is this taxable pay to the pastor? Or is it treated like a housing allowance?

If taxable as paid directly to the pastor, would it not be taxable pay if the church paid the money into the HSA directly? Note: this pastor has requested that we withhold federal and state income tax from the salary portion of his pay.

If the HSA allowance is also taxable, should we withhold income tax from the HSA allowance as well?

Secondary question: If we pay into an HSA for anyone, are we required to make that available to everyone who works for the church?

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