Pastor's Utilities Paid by Church

by Charli S
(East Lansing, MI USA)

In a situation where our pastor has an agreed upon housing allowance, but the church also has a budget line where we pay his utilities. Should the utilities that we pay for him be reported somehow on his W-2?

Comments for Pastor's Utilities Paid by Church

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Apr 08, 2022
Reporting Housing Allowance
by: Vickey

First of all, let me say that I strongly encourage my church clients NOT to pay a their Pastor's personal utility bills with a church check or card.

A better way is to pay the minister the amount designated and "pre-approved" as a housing allowance and let them pay their own utility bills.

BUT to get back to your question... yes... you can report the total amount paid in "housing allowance" payments in Box 14 on a W-2.

Box 14 is an information box only and the minister will still be responsible to report that amount on a Schedule SE in their personal income tax return.

Important! Don't report any amount paid as a "housing allowance" in Box 1 of a W-2. Box 1 is for reporting "taxable" compensation only.

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Join in and write your own page! It's easy to do. How? Simply click here to return to Minister's W-2.

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 =)

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