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June 11, 2013

Q&A: Which House Qualifies for the Housing Allowance?

How clergy should handle multiple residences after the Driscoll decision.

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Q: I know the recent Driscoll decision means a pastor can't claim two homes for his or her housing allowance. In a situation where a pastor answers a call in one state, but his or her family stays behind to sell the current residence and to allow the kids to finish school, which home should be used for the pastor's allowance provided by the new church?

A: As of March 2013, the regulations allow the housing allowance for the primary residence of the clergy. As a result, the expenses related to the place where the minister primarily resides qualify for the housing allowance. In this case, the minister's housing expenses at his new place of call will qualify for the housing allowance. The expenses related to the old home are not counted after the minister relocates.

For more help with clergy housing allowances, check out chapter 6 of Richard Hammar's Church & Clergy Tax Guide.

Frank Sommerville is a shareholder in the law firm of Weycer, Kaplan, Pulaski & Zuber, P.C. in Houston and Dallas, Texas, and an Editorial Advisor for ManagingYourChurch.com. He received his Masters in Professional Accounting with an emphasis on taxation from the University of Texas at Arlington. His law degree is from the University of Houston Law Center. He holds a license as a Certified Public Accountant. He is also Board Certified in Tax Law by the Texas Board of Legal Specialization. He is rated AV (highest possible) by Martindale-Hubbell Legal Directory.

Related Tags: benefits, clergy, compensation, housing allowance, IRS, pastors, taxes

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