Q&A: Can an Interim Minister Receive a Housing Allowance?

The Tax Court’s “five-factor test” provides the answers.

We are about to hire an interim minister of missions and community ministry. The candidate is an ordained minister. As an interim employee that is hired by the church through the personnel committee, can she claim a portion of her salary as a housing allowance?
Yes, an interim minister can request that a portion of her compensation be designated as a housing allowance, provided the minister both qualifies as a minister and is performing ministerial duties. The Tax Court’s “five-factor test,” Knight v. Commissioner, 92 TC 199, for who is a minister for federal tax purposes is anyone who has the ability to:
  1. administer sacraments;
  2. conduct religious worship;
  3. have management responsibility in a local church or religious denomination (control, conduct, or maintenance of a religious organization);
  4. demonstrate he or she is ordained, commissioned, or licensed; and
  5. demonstrate he or she is considered to be a religious leader by his or her church or denomination.
  6. To be considered a “minister,” only the fourth factor is required, though, with a balancing test applied to the remaining four factors by the IRS. Once classified as a minister, the minister also must be performing ministerial duties as his or her predominant duties. When a minister works for a church, these duties include (1) the performance of sacerdotal functions; (2) conducting religious worship services; or (3) being involved in the control, conduct, or maintenance of a religious organization.
Elaine L. Sommerville is licensed as a certified public accountant by the State of Texas. She has worked in public accounting since 1985.

This content is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. "From a Declaration of Principles jointly adopted by a Committee of the American Bar Association and a Committee of Publishers and Associations." Due to the nature of the U.S. legal system, laws and regulations constantly change. The editors encourage readers to carefully search the site for all content related to the topic of interest and consult qualified local counsel to verify the status of specific statutes, laws, regulations, and precedential court holdings.

ajax-loader-largecaret-downcloseHamburger Menuicon_amazonApple PodcastsBio Iconicon_cards_grid_caretChild Abuse Reporting Laws by State IconChurchSalary Iconicon_facebookGoogle Podcastsicon_instagramLegal Library IconLegal Library Iconicon_linkedinLock IconMegaphone IconOnline Learning IconPodcast IconRecent Legal Developments IconRecommended Reading IconRSS IconSubmiticon_select-arrowSpotify IconAlaska State MapAlabama State MapArkansas State MapArizona State MapCalifornia State MapColorado State MapConnecticut State MapWashington DC State MapDelaware State MapFederal MapFlorida State MapGeorgia State MapHawaii State MapIowa State MapIdaho State MapIllinois State MapIndiana State MapKansas State MapKentucky State MapLouisiana State MapMassachusetts State MapMaryland State MapMaine State MapMichigan State MapMinnesota State MapMissouri State MapMississippi State MapMontana State MapMulti State MapNorth Carolina State MapNorth Dakota State MapNebraska State MapNew Hampshire State MapNew Jersey State MapNew Mexico IconNevada State MapNew York State MapOhio State MapOklahoma State MapOregon State MapPennsylvania State MapRhode Island State MapSouth Carolina State MapSouth Dakota State MapTennessee State MapTexas State MapUtah State MapVirginia State MapVermont State MapWashington State MapWisconsin State MapWest Virginia State MapWyoming State IconShopping Cart IconTax Calendar Iconicon_twitteryoutubepauseplay