The following comments, tips, and Q/A were provided by FreeChurchAccounting’s generous readers:
Christmas Bonus
Our Pastor’s salary this year has been designated to Housing Allowance. Will his Christmas Bonus go on a W-2 even if it’s only a small sum? Thanks, …
Housing Allowance
Is Housing Allowance included on Form W-2, Box 1 (Wages, Tips, Other Compensation)
Full-Time RVer
My denomination designates my pension as “housing allowance” and has an IRS letter confirming that designation.
Beginning in June 2020 we live full …
Housing Allowance on Paycheck
I am an ordained minister and part of my compensation plan agreed upon in June 2021 was to move half of my pay to a housing allowance amount.
My paychecks …
Interim Ministry Question
We hired an interim pastor who resides out of our area. He is requesting that based upon the fact that his employment will be less than 12 months, an …
Other donation from church
I received other donations from the church that is not a part of my salary, such as Pastor appreciation, vacation pay, birthday etc, from the church. It …
941 Form and W2 reporting for a Pastor
Our pastor’s amount earned is broken down by his salary/insurance/housing.
For the quarterly 941 form on line 2 for wages do I include his total amount …
Can Box 1 include Housing Allowance?
I have previously read “do not include clergy Housing Allowance in Box 1 taxable income” so I know that’s the recommendation.
However, if this does …
H&R Block Housing Allowance for pastors
I had to go back and file my 2018 taxes. I am using H&R Block software. The church I pastored did not report my housing allowance on the W-2, which was …
Housing Allowance and the 941 Form
We do not provide a salary for our pastor, only a weekly $200.00 housing allowance. Should we include this amount on the 941 Quarterly form?
Downpayment on new home
Can a minister who is currently renting while in between having sold their home and purchasing a new one use the down payment made in the purchase of their …
How Do We Report Insufficient Salary?
We approved our Full-time Senior Pastor for a $36K 2019 Compensation package: $18K Salary/$18K HA but the church could only afford to pay him a little …
1099 to S Corp instead of indiviual
We have an interim minister that we paid as a contract employee.
I was planning on issuing him a 1099.
He has asked me to issue the 1099 to his …
How to report housing for a pastor
Our pastor does not receive a salary, he turned it down so that his father (our former pastor) would continue to receive his salary.
Recently our new …
Housing Allowance Approvals
We began paying our pastor a salary on January 1, 2019. He will receive a 1099 for 2019. At the time, we discussed housing allowance but failed to get …
Housing Allowance Change in July
Our church has semi-annual business meetings–one in January and one in July. In the July business meeting in 2019, it was recommended that the pastor’s …
Major Appliance purchases
When an appliance is purchased on a payment plan, when does the expense become part of housing?
The full amount at the time of purchase or the monthly …
Housing Allowance Approval
Is there a process to get approval from the Federal Government before claiming housing allowance? Some sort of form to submit?
2 homes= full salary
One of the pastor’s at my church owns two homes. One he is currently living in while he remolds the other. So essentially he owns 2 homes. Can his …
No house allowance provided
I am helping our pastor do his taxes for 2017.
He receives no parsonage or allowance for housing.
He owns his house.
He has all his house expenses. …
Facilities director AND Campus Pastor
I am interested in learning more about when a pastor is considered a minister as determined by the IRS.
I My full-time facilities manager has recently …
HA is not approved for a Mortgage Loan
We were just denied a mortgage loan because our HA has not been effective for 12 months. Apparently this was written into effect in Trump’s new law as …
Non-salaried ministers and HA
We do not pay our pastors a salary.
We have a designated offering one Sunday every month and whatever amount that offering is will be immediately distributed …
Part time
How would HA be administered to a part time employee? Are they eligible?
(Vickey’s reply): If they are a minister…yes … they would be eligible …
Choices of Laptop & Software
Can I get a couple of recommendations of a good laptop brand that is compatible with a church accounting software?
I have a windows computer that has …
Housing allowance paid in appliances?
A church buys its paid minister some new appliances for their home, and they are also paid a housing allowance.
Can the value be added to housing …
Licensed Pastor as of June
I will officially be a licensed pastor as of June (I am in process as we speak and perform duties while finishing the classes but the last class is June.) …
Owning a home and living in a manse
I am not sure how to handle housing allowance and the reporting of fair rental value in my case.
I own a house 10 minutes from the church but the church …
Housing Allowance for office space
I am currently living in a small apartment, and plan on moving into a mobile home that has an extra bed room that will be used as an office.
Would …
Parsonage AND housing allowance?
Can a clergyperson who is provided with a parsonage free of charge also have part of their salary designated as housing allowance and enjoy tax relief …
Housing expenses in two states
I serve churches in two states (NC and NY) and have housing expenses in each, about 6 months in both states. How should the housing allowance be set up …
Info on w2
The business manager of the church withholds federal and state, pays FICA and also wants to include housing allowance.
I want to be sure that this …
Mileage not paid
We needed to remove the mileage our pastor was being paid due to the church budget crunch. He would like to get credit for that mileage as his tithe since …
Multiple W2s with Housing Allowance?
Can a pastor have housing allowance on multiple W2’s? Even when not changing churches mid-year.
Example: Pastor serves church and as a professor …
Pastors paying taxes
We are a small church of about 30, our pastor gets 40 percent of what the tithes and offering is but he has refused to pay taxes for 12 years.
He calls …
Interim Pastor Temporary Housing
We have an interim pastor on a short term basis…. maybe 3-4 months. He has a permanent home where he is retired about 150 miles from our location. …
Housing Allowance
May I take the housing allowance on income earned from a church controlled school?
I receive a salary from the church and a salary from the school. …
Deduct the rental value of a home?
I qualify for a pastoral housing allowance. If my house is paid for, is there anyway to still deduct the rental value of the home or am I limited to the …
Housing Allowance
Do you report the gross salary on the W-2 and put the Housing Allowance Total in Box 14 or subtract the Housing Allowance from the gross salary?
EX. …
Housing Allowance while on SDI
My husband has brain cancer and wants to go on temporary disability.
Is he eligible if he continues to receive a housing allowance of $2,040.00 per …
Gifting a Home to Minister
A home was given to our church as a gift from a family member after their parents passed away.
Can our church gift this home to our associate pastor? …
temporary housing
I am a minister and changed jobs 7 months ago which required a move to another city. I own my own home with a mortgage and maintain utilities at that town. …
building a garage
I own my home out right, no mortgage. Can I use a HA to build a garage?
Seconding
I have been approached by someone employed by a registered not-for-profit ministry to ask if we would “second” him.
By that he means we would officially …
Housing Allowance Only W-2 Needed?
I am in charge of the accounting and finances for a very small church plant. If we have properly designated an amount to be paid to our pastor as Housing …
Wages report on w-2
Have more questions? Our How To Guide can help!
I am a pastor of a small congregation that is paid 4000.00 yearly.
For 2015 1000.00 …
2nd home housing allowance
I’m seeing that “recent legislation” restricts the housing allowance to the home occupied primarily for purposes of ministry.
I don’t see that legislation. …
Housing allowance during leave?
My wife is clergy at a congregation that provides her with a housing allowance. we have purchased a house and deduct the mortgage etc. as a parsonage …
Severance paid as housing?
Can our pastor who is no longer an employee be paid his severance pay as a housing allowance? Would we report this as a 1099?
We will be paying his …
Donating Rental Expense to my pastor
Can I provide housing to my pastor in a home I am still paying the mortgage on, but it is not my primary residence.
Would I first donate the payment …
Self employement tax
If housing allowance is exempt from tax and one can opt out of Social Security, why does the minister pay self employment tax? I read on post that the …
Housing Allowance – Shared Residence
If two ministers’ families qualify and purchase a home together, live together and share housing expenses, would both ministers be eligible for a housing …
What’s our next step?
We became part-time pastor of a small, struggling church two years ago. It was agreed at the time that we would not receive a monetary salary until the …
Housing allowance PLUS parsonage
Our pastor is living in a church supplied parsonage but just bought a home. He will not move into the home for another month. Can he receive a housing …
New church parsonage allowance
The Treasury regulations 1.107-(1)(b) require that a housing allowance be established in the prior tax year.
For a new church (and a new minister hire) …
part-time
Are part-time ministers eligible for parsonage allowance?
Living in the Church Parsonage
When a pastor does not want to live in free church parsonage, can the assistant pastor or other church member live in church parsonage for free?
Can housing allowance be retroactive
My husband was an interim lead pastor 2013-2014.
We really did not think of housing allowance as this was the first time he was an Interim Pastor. …
housing allowance guidlines
Our Pastor just retired after many years of service with us. About 20 years ago they purchased the parsonage from the church. Then he received a what I …
Tax Responsibilities with a Parsonage
Our church is considering bringing on an Associate Pastor whose only compensation would be a parsonage.
For tax purposes, he is licensed. My understanding …
Retiree Housing Allowance
As a retired pastor can I claim any portion of my housing expenses as an allowance for Federal Taxes?
Reporting Housing Allowance on #941
Does Church report a ordained minister’s housing allowance
on its #941? HELP!!Our Minister of Music is an ordained minister. His part-time employment …
Renting Below Fair Market Value
The landlord is renting a home to a pastor, openly acknowledges that the amount charged is below fair market value, and reports the rental as such on their …
How to report pastors w2 to the IRS
As the secretary of the church. I filled out the pastors w2 online and electronically sent/filed it with the SSA.
Do I need to do anything else with …
Missionary returning home
We had a missionary returning home to leave the mission field. We had an old house that had not been lived in for 10 years and allowed him to live there …
Two Pastors Who Are Married.
What happens with the pastor housing allowance when two pastors are married and live in the same house? I am thinking of a case where the husband is the …
Deferred Housing Allowance
Can a church board establish an account for a pastor where a portion of his salary is placed in an investment account, under a written agreement between …
what if you have work 2 pastorates
What if you worked 2 pastorates this year. One was from January to July where we rented a home and the other is from August-December and we had a manse. …
minister paid hourly with HA
We have 3 licensed ministers who are eligible and have been approved for a housing allowance. However, their approved HA amount actually exceeds their …
W-2 box 1, housing allowance?
I handle payroll for our church, our last CPA reduced box 1 of the W-2 by the housing allowance amount and listed it in box 14. I moved over to intuit …
Payroll Set up if Housing
I am pretty new to all of the payroll taxes and laws. If we are only paying our pastor a housing allowance, do we still need to set up all of the payroll …
HA and W-2
To clarify, the church is responsible for designating the Housing allowance; the minister is responsible for tracking the actual expenses and/or the fully …
Deductions After Leaving RO
I left my duties as Religious Order in April of this year.
May I deduct expenses incurred for the remainder of the year against my housing allowance? …
housing allowance for visiting ministers
Can a church designate a housing allowance for a visiting minister if he visits once a month or more? A retired minister is preaching once a month – sometimes …
Brand New Church Plant With No Money
I am bi-vocational. I don’t accept any monies from the church. If the church cannot afford to pay out any housing allowance or the pastor refuses to receive …
Mission House
If a non-clergy employee of a church stays longer than 12 months in a mission house, will this benefit be considered income for the employee?
no mortgage
If my house is paid for, can I deduct a rent amount?
Part time ministers
Can a minister who is employed by a church part time to handle youth activities or other related church activities be granted a housing allowance even …
Pastoral Housing Allowance
I read the post about the LETTER that the pastor is given to confirm his housing allowance. But the post said that this letter is NOT sent in with the …
% or $ amount on board approve documents
What should be shown on the board approve document for the housing allowance? Is it by law that the % of the salary for the minister be shown or the actual …
Down payment for house purchase.
What does the housing allowance for “down payment for house purchase” work? Can a minister who is currently renting designate what they are putting into …
Applying for Social Security Disability.
Does housing allowance affect this? I am disabled and need to try to get SSI but I do get a housing allowance from our church, but not a salary. Will getting …
unpaid housing allowance due to pastor
What if the Church was unable to pay the pastor 100% of the (actual amount spent by the pastor, (for housing allowance expenses allowed by the IRS)for …
parsonage deduction from income
My church does not provide a check or reimbursement for parsonage expenses, rather it provides a pre-approved amount that can be counted as parsonage allowance. …
Housing allowance and 1099
Yes, my question is this. I am an elder in a church that helps with the support of a number of men who do not preach for us locally.
One of our men …
HA now possibly turned income.
Is a pastor required to pay rent on a parsonage owned by the church?
We provide him with 2000 a month HA which was previously used to pay rent at a …
Substantiating actual housing allowance
In regards to a minister having to substantiate the housing allowance, I have been receiving the allowance check from the ministry, let’s say for 500. …
Disallowed Housing Allowance
Our church had an audit completed last year due to the embezzlement of funds.
During the audit, it was discovered that the Pastor had directed the …
Can housing expense go on a 1099?
Our board approved the max $8000 housing expense for our part time pastor… Last year (her first tax season with us) I did it on her W-2. After tax season, …
PARSONAGE UTILITIES
When I became pastor I commuted back and forth to the church from my home (110 miles 1 way). To be closer to the church we moved into the parsonage and …
Expenses in Patio
Expenses in Patio putting a patio concrete at our backyard deductible? Appreciate your reply.
Pastor Ed Fuentes
Housing Allowance approval??
Housing Allowance approved for $300.00 a week
1.What goes into minutes the dollar amount or breakdown of the expenses so check can be issued?
2. Is it …
Pastor’s housing allowance
If a pastor lives part of the year in one state and part of the year in another, can they take the utilities, maintanence, etc on both homes?
Pastor Parsonage
What are some of the benefits to the ministry in having a parsonage instead of providing housing allowance?
Pastor purchasing his house
The church includes a housing allowance between 20 – 28% of the pastor’s salary? This does comply with IRS regulations, right?
Eligiblility for Housing Allowance
My dad is a retired Wesleyan minister. He pastored in a number of churches over the years, but it was not his primary source of employment over his working …
W-2 vs 1099
I was recently elected to the council of a small church that annually contracts with a retired ordained minister to serve as our pastor. He is 74 and collects …
Housing Allowance
We have a small non-profit incorporated church/ministry & I am a licenced & ordained minister.
Our board designated a housing allowance years ago …
Housing Allowance less than house rent
I am a pastor and the board of the church of which I am also an incorporator and president agreed to give me a housing allowance. All the amounts I receive …
Housing Allowance on W-2
Our pastor has a salary of $42000. $1200 is set as Housing Allowance. The $1200 goes into Box 14? Does $42000 go in box 1 or would it be $30,000.
Vickey’s …
Taxes for Housing Allowance
I want to make sure I am understanding this correctly. Our pastor is going to get $1000/month in housing allowance. With his approval on the w-4, we can …
Part time pastor & housing allowance
My husband will be working 15 hours per week (ordained minister). Can he use all of his pay toward housing allowance (his monthly pay will be less than …
Housing Allowance Eligibility
My uncle has a house church which is a official religious organization. Are housing allowances only for churches with a payroll? We are trying to be able …
HOUSING ALLOWANCE FORM
I pastor a very small church that pays me a small salary, but they cannot pay for my Housing Allowance.I have paid for my own Home. My former taxpreparer …
drawing my social secutity
when i sign up for social security does my parsonage allowance count toward my income
Answer
Anything you pay self-employment tax on such …
Box 14 Housing Allowance
Thank you so much for being there for many small church office secretaries and support staff. This is our situation. We had an assoc. pastor leave part …
Reporting a Housing Allowance
I receive all my salary in HA. I do not get a W2. How do I report that to the IRS?
vickey’s reply
If you are an employee of your church, …
What to Report on Schedule SE
I receive about 80% of my income as housing allowance, which isn’t taxed by my church. The other 20% is taxed. Do I just report my housing allowance …
W-2 and H/A
How can correction be made to the W-2 once the treasurer has sent them in?
The Total in box 1 was inclusive with the housing allowance and also listed …
Housing Allowance
No one really knows this answer. We outsource our payroll and the accounting firm has no idea. Our church employs 3 part-time ordained associate pastors. …
Taxes on Housing Allowance
I serve as a certified minister at my local church. My church has been taking our Social Security and Medicare taxes out of my paycheck.
My entire …
Housing Allowance and Parsonage
Housing Allowance and Parsonage, Are they the same?
Answer
No. A parsonage is simply a place where the minster and his family live. It is …
Reporting Housing Allowance on a W-2
I am receiving conflicting information regarding reporting a housing allowance on a W-2–how much of our pastor’s housing allowance must be reported on …
