Q&A: Housing Allowance
Can a new hire receive a housing allowance for the rest of the year?

Q: We're in the process of hiring a new youth pastor. Can we implement a housing allowance for the rest of 2014?

A: Presuming your new hire meets the criteria to qualify for a housing allowance, the church can set an allowance effective on their first day on the job (presuming they haven't started yet) through the end of the year. If they have already started, the allowance can be set from this day forward (in other words, an allowance can't be set retroactively).

Also, make certain the allowance is used to pay housing expenses and doesn't exceed the fair rental value of the home (furnished, plus utilities). Be sure to put the allowance in writing–perhaps as a part of the official minutes of the committee or board meeting at which the allowance is set.

For more information, see the article Allocating a Housing Allowance and chapter 6 of the 2014 Church & Clergy Tax Guide.

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