Is It Ok for My Church to Pay No Salary but Pay Housing Allowance?

by Dewana Inge
(Eden, NC)

My husband was recently installed as pastor after our current pastor retired. Our current pastor still receives a salary (under church agreement/contract. We are a small church so my husband only asked that the church provide him a housing allowance of $10,400 and not a salary. Is this ok and if so should he still receive a W2?

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Is it OK for my church to pay housing allowance that is more than his salary
by: Jean NJ

My husband accepted a job last year with a church that is trying to rebuild. They have a parsonage where we are living, but the rental value of the parsonage is more than the salary they are able to pay him. How do we do our taxes here?
Housing Allowance, but no salary. .
by: Lewis in NC

This will work if your husband legally qualifies for a housing allowance in the first place (see Housing Allowance to the left). In the example given, no W-2 would be required, but a letter from the church confirming the amount of the housing allowance at the end of the year would be necessary. This housing allowance must have been set up by the church board for a proactive application (meaning, from this time forward use)to be legal.

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