October 08, 2009

Itinerant Minister Housing Allowance Strategies

Question:

If an itinerant minister declared at the beginning of the year that the first x amount of dollars received would be considered his housing allowance, would that be an unreasonable interpretation of tax law concerning ministries?

Answer:

A housing allowance must be designated by action of the payer(s), not by declaration by the recipient, so I don’t believe the above strategy will work.

I recommend that a church providing an honorarium to an itinerant minister provide a written and signed breakdown of its remuneration including the portion designated as housing and any portion paid as reimbursement for properly documented travel or other costs. The minister may wish to provide guidance to the ministry as to the percentage and method for this statement.

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