What is the housing allowance cap?

by Barbara
(Riceboro, GA Liberty)

We are a small congregation less than 40 persons.

In the past we have not designated a 'Housing allowance' and given the pastor a 1099-Misc for the full amount paid to him annually.

We have a new pastor and we are able to pay the pastor $600 per week. How much could be used as a housing allowance and how is that determined?

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Determining a Housing Allowance
by: Vickey

Give him a housing allowance worksheet and once he completes it, turn it into the governing body and let them approve (and record in the meeting minutes in the form of a resolution) ... how much of his compensation will be designated as housing allowance payments.

I have examples of that housing allowance worksheet and resolution in my Church Accounting Package or let me know and I will send them to you...if you need them =)

Unlike compensation, there is no "cap" on designating a housing allowance. You could designate up to 100% of his $600 weekly compensation as a housing allowance, but be aware that he will be limited on how much he can claim as a housing exclusion on his personal income tax return. See my housing allowance page:
https://www.freechurchaccounting.com/housingallowance.html

Also, he would want to have "secondary" income to pay for non-housing expenses...if your governing body designate 100% of his compensation ...to avoid any "red flags".

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