salary or housing expenses

Our minister is paid a very small salary. He wants to claim it all as housing expenses and nothing as salary. Is this allowed? How would it be reported to the IRS?

Know the answer? Face the same situation? Please post your answer or comment by using the "comment" link below. Thank you!

Comments for salary or housing expenses

Click here to add your own comments

Oct 10, 2010

Designating a housing allowance
by: Vickey

A minister cannot designate part or all of his salary as a housing allowance.

The employing church is the only one with the authority to designate part or all of a minister's compensation package as a housing allowance.

The church must also make sure the amount they designate as an allowance for housing is determined before it is paid.

It should be included in a board approved resolution and properly documented in the church records.

If he is an employee of the church (most pastors are considered employees of their church), then his salary would be reported on a W-2.

Jan 06, 2011

Same situation
by: Anonymous

Our minister has asked to provide his salary as housing allowance and our church has agreed to this - under all stipulated rules. My question is can he request federal income tax withheld with no salaried income on his W-2. His housing allowance is entered in Box 14 of his W-2.

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 Clergy Tax Q&A.

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:

What’s this?

Facebook

Enjoy this page? Please pay it forward. Here's how...

Would you prefer to share this page with others by linking to it?

Click on the HTML link code below.
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.