Can all church employees qualify for housing allowance?

18 Jan Can all church employees qualify for housing allowance?

Question:

Can all church employees qualify for housing allowance?

Answer:

No. Section 107 of the Internal Revenue Code allows only a “minister of the gospel” to have a housing allowance.
Thus, only taxpayers who are serving as clergy under IRS rules for tax purposes are eligible for a housing allowance. These rules state that the person must be ordained, commissioned, or licensed by the church or denominational authorities and should be performing “ministerial services” such as administering the sacraments, conducting religious worship, or demonstrating management responsibility in a local church or denomination, and be considered as a religious leader by the church and/or denomination. Therefore, a church custodian or secretary cannot have a housing allowance.  (Lay employees do get the benefit of having the church pay one-half of their social security/Medicare taxes).

Original content by clergyfinancial.com. This information is provided with the understanding that Payroll Partners is not rendering legal, human resources, or other professional advice or service. Professional advice on specific issues should be sought from a lawyer, HR consultant or other professional.