Is my housing allowance exempt from the SE tax, in MY situation

by Leslie Pappas
(Fairfield, IL)

I currently serve as a part-time pastor of a Baptist church, and it has given me part of my salary as a housing allowance deduction (only from FICA wages, etc.), but I read Pub. 517 from the IRS site that specifically stated that my housing allowance normally would have to be reported as part of my SE Form, UNLESS I WAS RETIRED, IN WHICH CASE, THAT, TOO, WOULD NOT HAVE TO BE INCLUDED when completing my SE portion of my tax liability.

I am retired, and am receiving my monthly social security check, so I figured that I could exclude the housing allowance portion of the church's pay from BOTH FORM 1040 AND FORM SE I correct?

vickey’s reply

Yes..however...according to Guidestone Financial Services...

“Retired” ministers may not have to pay SECA taxes on their benefits designated as housing allowance. What constitutes “retirement” for purposes of these rules about SECA tax and the housing allowance depends on an individual’s particular facts and circumstances. Ministers with questions about whether they are “retired” for this purpose should consult their tax advisors.

The IRS may view ministers as not retired if they have not had a meaningful break in service or change in work duties. Ministers and their tax advisors should work together to address the relevant facts and circumstances of each individual case.

So I would advise you to speak to a tax professional before you omit your housing allowance from your SE portion of your tax liability.

Hope this helps,

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