Managing the added expenses involved with reopening your church
In order for clergy to exclude this from their federal income tax, their church must designate the amount of the housing allowance in advance. The designated amount must appear as a resolution approved by the church trustees of finance committee in the formal church records.
Three common types of clergy housing allowances:
Example: If a clergy’s annual compensation is $65,000, and their church has designated a housing allowance of $15,000, they subtract that from their salary, bringing their taxable income for federal income tax purposes to $50,000. They must pay Social Security/Medicare tax on the entire compensation of $65,000.
However, to determine how much to claim for the housing allowance, it must be the smallest amount of these three categories:
You will be linking to another website not owned or operated by MMBB. MMBB is not responsible for the availability or content of this website and does not represent either the linked website or you, should you enter into a transaction. The inclusion of any hyperlink does not imply any endorsement, investigation, verification or monitoring by MMBB of any information in any hyperlinked site. We encourage you to review their privacy and security policies which may differ from MMBB.
If you “Proceed”, the link will open in a new window.