HOUSING ALLOWANCE UPDATES
Did you know that there is a specific department within the IRS that is solely focused on minister tax compliance? Did you know that the primary item they audit is the minister's housing allowance? Here is a quick excerpt from the IRS website on the subject: https://www.irs.gov/taxtopics/tc417
Every year, we assist our clients in complying with IRS regulations that require housing allowances to be approved BEFORE they are paid out. As stated in the linked article above:
“In order to be able to exclude the housing allowance from income, the minister's employing organization must officially designate the housing allowance as such before paying it to the minister.”
ChurchBiz helps guide clients through this process each year. Here is what you can expect in the next few weeks.
Housing Allowance Worksheets - ChurchBiz will send an email requesting that ministers communicate their desired 2025 housing allowance to us. Clients can use one of the two PDFs (owner vs renter) to help calculate this amount if they choose. This form is filled out and sent back to their ChurchBiz CSR.
Board Motion Form Created - Once you have sent all your requested 2025 housing designations, ChurchBiz will create a board motion document reflecting the housing allowances for each minister in your church. ChurchBiz CSRs will send this document back to your church to be signed.
Board Motion Form Signed - Each church needs a qualified representative/board member/elder to sign the board motion. There is a signature and date spot on the form.
Return and Keep on File - We ask that our churches return (email) the board motion doc to ChurchBiz no later than Friday, December 27th. This allows us to have that document on file and update payroll before the new year.
If we don’t receive the approved board motion back, we will continue with the existing housing allowance that was on file for 2024.
If you have any questions about the housing allowance or the process of getting that updated each year, please contact your ChurchBiz CSR. If you are not a ChurchBiz client and have questions about housing allowance, you can email us at info@ChurchBizsupport.com.