Q: I submitted what I thought was an appropriate amount to meet my housing needs this year, ensuring the request fell within the fair market value of my home, but my church’s board rejected it. Is that legal?
Is a Church Legally Obligated to Approve a Housing Allowance?
No, a church is not legally required to approve a housing allowance for its minister. There is no authority or regulation that grants ministers a legal right to a housing allowance or mandates that a church approve a specific amount requested by the minister.
While a minister may submit a worksheet showing projected housing expenses, the church and its leadership have the discretion to set compensation levels, including the housing allowance, in a manner they deem appropriate.
Can a Church Deny a Housing Allowance Request Entirely?
It would be unusual for a church to deny a housing allowance outright, assuming the minister qualifies for one under the tax code. More commonly, church leadership might adjust the requested amount based on factors such as:
- Alignment with the minister’s anticipated actual expenses
- The fair rental value of the minister’s home (furnished, including utilities)
To avoid disagreements, clear communication and documentation are essential when requesting a housing allowance.
Best Practices for Requesting a Housing Allowance
To ensure smooth approval of a housing allowance, consider the following steps:
- Provide thorough documentation, including projected housing expenses and supporting evidence.
- Communicate with the church board beforehand to clarify the mechanics and expectations for the housing allowance.
- Seek input from a local real estate agent to verify the fair rental value of your home if necessary.
Can a Housing Allowance Be Adjusted Mid-Year?
While a housing allowance cannot be amended retroactively, it can be prospectively authorized or adjusted for the remainder of the year. If circumstances change or a new amount is desired, the church’s governing board can approve a new housing allowance to apply going forward.
FAQs About Rejecting a Minister’s Housing Allowance Request
Is a housing allowance a legal right for ministers?
No, there is no legal requirement for a church to provide a housing allowance or approve a specific amount requested by a minister.
Why might a church reject a housing allowance request?
A church may reject or adjust the requested amount if it believes the amount is not supported by documentation or is not aligned with housing expenses and fair rental value.
What documentation should a minister provide when requesting a housing allowance?
A minister should provide a worksheet detailing anticipated housing expenses, including rent, utilities, furnishings, and other related costs.
Can a church retroactively approve a housing allowance?
No, housing allowances cannot be applied retroactively. However, a church can authorize or amend a housing allowance to apply prospectively for the remainder of the tax year.
Conclusion
Churches are not legally required to approve a minister’s housing allowance request, but clear communication, proper documentation, and understanding of housing allowance rules can help avoid disputes. When adjustments are needed, churches can amend the housing allowance prospectively.
