Question: We are new pastors and receive no salary. The church is paying housing and utilities, as well as, an auto allowance. Do we need to report anything?
Answer: Yes. Your auto allowance is taxable compensation and should be included on a W-2 as such.
Utilities are a part of what is considered housing. If the church allows you to stay in a church-owned or church-leased domicile and the church pays the utlities this is considered a parsonage and there is nothing to report other than the auto allowance.
If you own or have rented a domicile and the church is paying you the amount of your monthly payment plus your utilities there is still a need to report. The amount is not taxable but the amount of housing goes in box 14 of the W-2. Further more you need an official housing allowance written on paper as documentation and it needs to be approved by your Church Council and entered into the minutes before Dec 31 for the coming year or ASAP if someone starts mid year.
Blog Author
- C. Paul Glenn
- is the Executive Director of Finance & Operations at Grace Covenant Church in Cornelius, NC. He is also Chairman of Harvests of Hope Int'l. He has an accounting degree from Oral Roberts University and has been married to Susan since 1989. They have two children. Prior to ministry Paul packed a wealth of experience into his career path which includes positions as a public accountant, a financial analyst, a controller and CFO, as well as a management consultant. His pastor’s heart guides a passion to oversee the business aspects of ministry to (1) see the lost find Christ and (2) to allow other pastors and leaders to more freely shepherd their congregations. He regularly consults churches regarding his unique insights on church construction and is also coaching and mentoring over 120 churches in aspects of administration. Working with a team to found Harvests of Hope Int'l he now has the privilege as its Chairman to bring hope to families affected by HIV/Aids throughout Africa.
Tuesday, September 30, 2008
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