What is included in housing allowance?

by denise

Our pastor lives in our parsonage, the church pays the mortgage, garbage, water, electric, lawn care, all repairs and upkeep for the property so should our pastor be able to use those amounts as a housing allowance?

Comments for What is included in housing allowance?

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Jan 14, 2013
housing paid by Church
by: Anonymous

Read IRS pub 1828 http://www.irs.gov/pub/irs-pdf/p1828.pdf
The amount paid by the church would go in box 14 housing allowance on the W2 as it is taxable for social security.
Benefits are given by the Church they are not controlled by the pastor.
Basically: if a pastor can claim it on their own taxes it can be given as a benefit but the benefit must be decided on by the church in advance.
It is up to the pastor to do the worksheet to verify how much is actually tax exempt. see pub 517 for worksheet http://www.irs.gov/publications/p517/ar02.html#en_US_2011_publink100033704
You might also want to read the pub 15 series.

Jan 24, 2013
Parsonage and Self-Employment Tax
by: Vickey

Yes, but make sure your pastor knows that even though he is not subject to income taxes on the use of the parsonage...the fair rental value of the parsonage plus utilities is added when figuring his self-employment tax.

Feb 05, 2014
parsonge allowance
by: Anonymous

If my church gives me a parsonage allowance or 3000. Plus they give housing allowance of FRV and UTILITIES Arent' they suppose to reduce box 1 by 3000 and put it in box 14 as PA?

Feb 06, 2014
by: Sandi

If the church designated HA; remember you can only claim qualified expenses up to the amount the church designated as a housing allowance.
So even if you didn't get housing taken out of box 1 you can still adjust your income by qualified expenses.
Ask your church for a letter with the amount and use the IRS worksheet page 24 http://www.irs.gov/pub/irs-pdf/p517.pdf

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