Court Upholds Clergy Housing Allowance
Federal Appeals Court Upholds Clergy Housing Allowance On Friday, March 15, 2019, the Seventh Circuit Court of Appeals ruled in favor of the clergy housing allowance. In a unanimous 3-0 decision, the judges ruled that the housing allowance is constitutional and cited two legal precedents in support of their ruling. This is a tremendous victory…
Don’t Underestimate Your Housing Allowance!
In our last article about the Clergy Housing Allowance, we discussed the fact that if you don’t properly designate and document a Housing Allowance, IRS could end up disallowing it. Even when you properly document a Housing Allowance, there is an additional risk that we should discuss: designating too little. Consider the following scenario: A…
How to Properly Designate a Housing Allowance
Do you get paid an allowance for housing? Are you sure that it’s set up correctly? Double checking your housing allowance is an easy way to avoid annoying tax headaches later. In order to take a housing allowance, there needs to be proper documentation: A specific dollar amount or percentage of salary must be designated,…
Guide to Minister’s Compensation
You may find it helpful to begin by considering the goals of a compensation package. A church should provide its staff with adequate income so that they can fulfill their roles without undue concern about current and future financial needs. Freedom from financial anxiety lets the minister focus on his or her service. It also helps your church…
Can Nursing Home Expenses be Claimed as Housing Allowance?
If the clergy person is a permanent resident of the nursing home, the housing allowance applies to the nursing home because the nursing home is the minister’s primary residence. Charges for food and medical care are not considered housing expenses. Ask the administrator of the residence to provide the portion of their monthly payments that…
Housing Allowance for Clergy Couples
Clergy couples are limited to the equivalent of one housing allowance between the two incomes, providing they live in the same location. In this instance, clergy need to be mindful of the amount requested by each spouse in the annual housing allowance resolution. Generally, any expense to provide or maintain the home can be used to justify…
What type of housing expense records should clergy be keeping?
Ideally, clergy should keep careful housing expense records to determine whether expenses are greater or less than the annual designation. Records are also important for estimating a reasonable housing allowance for the next year. Original receipts, invoices, canceled checks, charge card records, etc. are all essential. To simplify record keeping, some pastors find it helpful to have one charge…
Clergy Couple Housing
Each person of a clergy couple is entitled to the same housing allowance ordinarily provided a pastor who is not married to a pastor. Both pastors in a clergy couple are to receive a housing allowance. When cash housing allowances are provided, the contributions for each pastor are based on the total of base compensation…
Housing Allowance
The housing allowance which you pay your Pastor in cash and the housing allowance the IRS allows your Pastor on an income tax return might not be the same number. The reason for this is that the IRS includes more expense items when calculating a housing allowance than the absolute minimum items these guidelines mention…
Parsonage Provided
 When a parsonage is provided, the congregation should pay for utilities and maintenance. (For tax purposes it is usually to the pastor’s advantage if items like utilities, maintenance, etc. be paid for directly by the congregation rather than to the pastor and then the pastor paying these expenses.) Parsonage Fair Rental Value In addition to…
