Can non-minister employees receive a HA?
No. To receive the special tax treatment of a ministerial housing allowance, the employee must meet the IRS 5-test definition of a minister. How does the church report this tax benefit? The church is not required to report the minister’s HA to the IRS. However some churches choose to report it in Box 14 of the minister’s W-2 (which is labeled Other) as a courtesy to the minister. Or, churches can just include the amount of the HA in a separate letter to the minister. (This separate letter should not be sent to the IRS and will not be included or attached to the minister’s personal tax return.) Are HA payments exempt from all taxes? No. Ha payments are exempt from federal income taxes, but not from self-employment taxes (Social Security). A minister who receives a housing allowance must report the total amount of HA payments on a SE schedule on their personal income tax return. Are HA payments exempt from state taxes also? Generally, HA payments are exempt from most state’s income tax.H
Related Questions
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- Some employees who are required to travel can deduct $11 per meal, regardless of the amount paid for the meal. Does that apply to me?
- Can non-minister employees receive a HA?
