Amy, Author at The Pastor's Wallet

Amy

This is the bio under users

Celebrating 10 Years of The Pastor’s Wallet & What Comes Next

by Amy Monday, September 7, 2026

Where We Were

The Pastor’s Wallet turned 10 years old this past Saturday, September 5. When I started this journey, I was a stay-at-home mom with dreams of becoming a financial planner to help people with this very important, yet equally intimidating, area of life. So much has happened since then! Here’s a snapshot of the last 10 years:

2016: Pastor’s Wallet launches

2018: Both kids in school full-time

2019: Start working at the most wonderful company in the world, Guide Financial Planning

2020: Become a homeschool mom (thank you, coronavirus); Earn a Master’s in Family Financial Planning & Counseling

2021: Publish The Pastor’s Wallet Complete Guide to the Clergy Housing Allowance; Pass the Certified Financial Planner exam; Become a registered financial advisor

2022: Develop long covid

2023: Earn Certified Financial Planner designation

2024: Earn Certified Kingdom Advisor designation

2025: Move across the country

During the past 10 years, I have written almost 300 blog posts; Pastor’s Wallet has been viewed over 1.2 million times; I have spoken at numerous webinars and in-person events; and I have provided financial planning and educational consultations for many of you as individuals. I have learned that I love financial planning for pastors. You truly are my favorite clients, and I am glad that God led me to you.

Where We Are

You may have noticed in the timeline above that I developed long covid at the beginning of 2022. It has drastically changed my life, and by extension, Pastor’s Wallet. One effect of long covid is that writing is very difficult for me. For the last 4 ½ years, I have barely had the capacity to do anything with the blog.

I really appreciate those of you who have been praying for me over the years, and I owe you a health update. My condition isn’t improving, but I have limited my life sufficiently and found some helpful treatments (thank you to the reader who recommended hyperbaric oxygen therapy—it has been life-changing!) so that I can live a semblance of a normal life. It has been very hard.

My motto has become Job 1:21, “The Lord gave and the Lord has taken away; may the name of the Lord be praised,” and I cling to Jesus’ explanation of the man born blind in John 9:3, “…this happened so that the works of God might be displayed in him.” I pray the same for me. Interestingly, I was reading Andrew Murray’s Absolute Surrender the very month I contracted the virus that started this journey. Though I am not enjoying the journey, I know that a lot of good has come from it and God has done some important work in me.

Where We Are Going

I’m sorry that I haven’t been able to do much for Pastor’s Wallet since getting sick. I’m working on getting some help so that I can do more for you. I have ideas, including revamping the website, starting a video podcast, and offering webinars. I have always been an idea person, but I have learned intimately what Proverbs 16:9 means when it says, “In their hearts humans plan their course, but the Lord establishes their steps.”

I can’t make any promises regarding what the future holds for Pastor’s Wallet. I will do for you whatever the Lord enables me to do. (So if you want more, ask him to heal me!) No matter what, I consider it an honor to support you and play even the smallest part in your ministry of advancing God’s kingdom.

10Comments

Pastor’s Love Offering: Gift Or Taxable Income?

by Amy Monday, August 24, 2026

A 2018 court case helped to clarify when pastoral gifts are considered taxable income. Make sure you know how to classify your income to avoid owing penalties and back taxes.

View post

7Comments

H.R. 227: Will Congress Let Clergy Opt Back Into Social Security?

by Amy Monday, July 6, 2026

Members of the clergy are unique among American taxpayers in that they have the option to opt out of Social Security. There is a short amount of time at the beginning of a person’s ministerial career when they can request an exemption based on a conscientious objection.

The exemption, provided for on IRS Form 4361, is a lifetime exemption for all ministerial earnings. Many new ministers, however, don’t understand the true consequences of their decision and later regret it. I know, because I get a lot of emails from them when they’re in their 50’s and 60’s, haven’t saved for retirement, and realize that they have no safety net and no plan.

Past Exemption Revocation Opportunities

This is not a new problem. From time to time, Congress has given clergy the option to revoke their election. In 1978 and in 1986, there were short windows of time when pastors had the opportunity to opt back into Social Security. The Ticket to Work and Work Incentives Improvement Act of 1999 gave ministers a 2-year window in which to change their minds with Form 2031. The last deadline to opt back in was on October 15, 2002.

In February of 2020, California Congressman Kevin McCthy introduced H.R. 5904 (116th), also called the Clergy Act of 2020, that would allow pastors to opt back in. It never made it out of the House Ways and Means Committee and became one of the many casualties of the covid-19 pandemic, as govtrack.us aptly states, it “died in a previous Congress.”

You haven’t been forgotten, though.

H.R. 227: Clergy Act

On January 7, 2025, Rep. Vince Fong of California introduced a bill to the U.S. House of Representatives that would allow clergy to revoke their exemption from Social Security coverage. Referred to as the “Clergy Act,” here is the government’s summary of the bill:

This bill establishes a two-year window for certain members of the clergy and Christian Science practitioners to revoke their exemption from Social Security and Medicare taxes on ministerial earnings. Under current law, such individuals who object to participation in public insurance programs on religious or conscientious grounds may apply to the Internal Revenue Service (IRS) for an irrevocable exemption and will not receive Social Security or Medicare benefits in retirement unless they have qualifying credits from other employment.

The IRS must develop a plan to inform members of the clergy and Christian Science practitioners of their eligibility to revoke prior exemptions, pursuant to the bill’s changes.

You can read the full text of the bill here.

On April 27, 2026, the bill passed the House with 350 votes in favor, 5 votes against, and 74 who did not vote. You can see how your local representatives voted here. On April 28, 2026, it was received in the Senate, read twice, and referred to the Committee on Finance.

How to Take Action

If you want this bill to pass, I would encourage you to contact your state Senator. If you feel strongly about it, have your friends and family contact them as well. Here is the U.S. Senate Directory where you can look up your Senators and how to contact them. I looked up mine, and their office addresses and phone numbers were listed. There were also links to their specific websites with online forms for sending them messages.

For those of you who regret opting out of Social Security, this is the closest we’ve been to having the chance to opt back in since 2002. Our nation is a representative democracy, so make your voices heard!

3Comments

How To Make Quarterly Estimated Tax Payments For Ministers

by Amy Monday, June 15, 2026

As we’ve discussed previously, churches are not required to withhold taxes for pastors and other clergy. Because of a minister’s dual taxation status, the IRS expects them to pay as if they were self-employed.

How do self-employed people pay taxes?

Through quarterly estimated tax payments. So, as a pastor, you’re required to make quarterly estimated tax payments.

What Are Quarterly Estimated Tax Payments?

Our American tax system is a pay-as-you-go system. Many people don’t realize this because they think they only pay once a year- on April 15. However, most employees are paying all year long, out of every paycheck. The yearly tax return they file is just to check their balance for over- or under-payments.

The IRS doesn’t want to wait a year to get their money. They want it immediately, which is why most employees are subject to mandatory tax withholding. Self-employed people, though, don’t have an employer to withhold their taxes for them. And many of them do not pay themselves a regular paycheck from which taxes could be withheld. Therefore, the IRS set up the quarterly estimated tax payment system.

Self-employed people (or those treated as if self-employed, like clergy) are required to pay taxes four times a year with IRS Form 1040-ES. These payments include federal income tax and SECA taxes, which are the Social Security and Medicare taxes.

When Are Quarterly Estimated Tax Payments Due?

While quarterly payments are due four times a year, the year is not divided up equally. This is when each payment is due and what each payment covers:

If the due date falls on a weekend or holiday, it gets pushed back to the next business day. For example, in 2028, January 15 is a Saturday, so the payment is due the next business day, Monday, January 17, 2028.

How Should Pastors Calculate Quarterly Estimated Tax Payments?

IRS Form 1040-ES includes a worksheet for calculating estimated payments. However, it gets complicated. Use that if you want something comprehensive and exact. Otherwise, I will explain the basics of calculating your estimated payments.

Calculating Estimated Income Tax Payments

I’ll start by addressing income taxes, because that applies to all pastors, whether or not you’ve opted out of Social Security. If you’ve opted out, this is all you have to worry about. If not, you need to read the next section as well.

The basic way to figure estimated taxes is to take your expected salary (not counting housing allowance) and subtract expected deductions (standard or itemized, plus half of SECA taxes due) to find your expected taxable income.

Expected Salary (excluding housing allowance) – Expected Deductions = Expected Taxable Income

Then look up the tax on that expected taxable income in the 2026 tax rate schedules below (taken from IRS Form 1040-ES).

That is your expected annual tax. You can lower it by any tax credits you expect to receive, such as the child tax credit. Once you’ve accounted for credits, you can just divide it so that it represents the quarter you are paying. September’s estimated payment covers 3 months (June, July, and August), so the equation would look like this:

Estimated Annual Tax (Less Expected Tax Credits) * 3/12 = Quarterly Tax Payment Due on September 15

If you have irregular income, you should look back at just the months in question. Take your income from those months, subtract the time period’s portion of your expected annual deduction (for example, 3/12 of the standard deduction), and use that amount to figure your tax for the quarter.

Remember that your housing allowance is exempt from federal income taxation, so it should not be included in these calculations!

Pastors Participating In Social Security

If you chose to remain in the Social Security system, then you have to pay SECA taxes on top of your income taxes. Remember that your housing allowance is not exempt from SECA taxes, so you will need to include it in your total income. If you live in a parsonage, you also have to include the fair market rental value of the parsonage in your total income.

Your SECA taxes are 15.3% of 92.35% of your income (capped at $184,500 in 2026). For this September’s payment, you would calculate it as:

Income (including housing or parsonage allowance) * 0.9235 * 0.153 = Annual SECA Taxes

Annual SECA Taxes * 3/12 = SECA Taxes Due This Quarter

If your total income exceeds $184,500, then your SECA taxes are 15.3% of 92.35% of income up to that amount plus 2.9% above that amount.

Your quarterly estimated tax payment is comprised of both your estimated income taxes due and SECA taxes.

How To Avoid Penalties

If you don’t pay your estimated taxes, you will be penalized by the IRS. You can also incur penalties if you underpay. Sometimes it can be hard to estimate taxes, so the IRS created “safe harbor” calculations. If you use these calculations you will not be penalized, even if you underpay. You should be safe from penalties if you:

Expect to owe less than $1,000
Pay 100% of your previous year’s tax liability if your adjusted gross income is under $150,000. If it is over that, you have to pay 110% of the previous year’s tax liability.
Pay within 90% of your actual tax liability for the year

Another Way To Do It

Making quarterly estimated tax payments can be a real pain. If you don’t want to have to deal with this, ask your church to withhold taxes for you. While they aren’t required to, they are allowed to. They can’t pay your SECA taxes for you, but they can withhold enough to cover your SECA taxes at the end of the year. This article explains how it works.

Another way to avoid paying quarterly estimated taxes is by having another employer withhold more. If you or your spouse is an employee of a secular company that withholds taxes, just have them withhold enough to cover your pastoral income. Changing your withholdings is as simple as filling out a Form W-4 and filing it with the company’s Human Resource department.

6Comments

The New TrumpIRA Is Coming. Here’s Why Your Church 403(b) Is Still the Better Path.

by Amy Monday, May 11, 2026

Paul McWilliams is a pastor’s kid turned financial advisor specializing in helping pastors and churches make wise financial decisions that align with their mission.

On April 30, 2026, President Trump signed an Executive Order creating TrumpIRA.gov, a new federal platform set to launch January 1, 2027. The headline is genuinely good news for a lot of American workers: a streamlined way to compare low-cost IRAs, plus up to $1,000 per year in federal Saver’s Match contributions for eligible lower- and middle-income earners.

If you’re a pastor without a retirement plan at your church, this matters. But if your church already offers a 403(b), or you’re considering whether to push for one, don’t let the new shiny option distract you. For ministers, the church 403(b) is still the most powerful retirement vehicle available, and it isn’t even close.

Here’s why.

The Housing Allowance Continues in Retirement

This is the single biggest reason a church 403(b) beats every other retirement account on the planet for ministers. Distributions from a church-sponsored 403(b) can be designated as a housing allowance in retirement, which means a portion of what you withdraw can be tax-free for federal income tax purposes (subject to the lesser-of rules in IRS Publication 517).

A TrumpIRA cannot do this. A traditional IRA cannot do this. A Roth IRA cannot do this. A SIMPLE IRA cannot do this. A SEP IRA cannot do this.

Roll your church 403(b) into an IRA at retirement, and you permanently forfeit this benefit. For many pastors, that one decision can cost them thousands of dollars in lifetime taxes.

SECA Savings While You’re Still Working

Pastors pay self-employment tax (SECA). Contributions to a church 403(b) made through salary reduction reduce your SECA wages, which means you’re not just deferring income tax, you’re saving SECA on every dollar you contribute.

A TrumpIRA contribution is made with money you’ve already paid SECA on.

Higher Contribution Limits

IRA contribution limits are capped well below what a 403(b) allows. In 2026, you can contribute up to $24,500 in salary deferrals to a 403(b), with additional catch-up contributions if you’re 50 or older. The maximum contribution allowed to an IRA is $7,500 ($8,600 with catch-up for those over 50). For a pastor trying to make up for years without a retirement plan, that gap is enormous.

In addition to the salary you can contribute, the church can also make contributions to the 403(b), either through a match or non-elective contribution. This is not an option with the TrumpIRA.

“But My Church Is Too Small for a 403(b)”

This is the most common objection I hear, and it’s based on outdated information. Every minister can have access to a church 403(b), regardless of church size, budget, or staff count. A bivocational pastor at a 30-person church plant can have the same access as a senior pastor at a multi-site campus. The right advisor can establish a church 403(b) for any qualifying minister, often with minimal cost or administrative burden to the church.

The Bottom Line

TrumpIRA.gov is a good development for the broader American workforce. But it isn’t designed for ministers, and it cannot replicate what Congress has specifically built into the tax code for pastors through the church 403(b).

For ministers, the housing allowance continuation alone is usually worth more than the Saver’s Match many times over. Add SECA savings and the higher contribution limits, and there is almost no scenario where a pastor with access to a 403(b) is better off in a TrumpIRA. And every pastor can have access.

7Comments

What Does It Mean for Men to “Provide?”

by Amy Monday, April 20, 2026

A Pastoral Reflection on 1 Timothy 5:3–16

This is a guest post by Matt Winquist. Matt is a pastor, husband, and father who has experienced family life from both the pulpit and the living room floor. He and his wife, Kelly, raised their two daughters through many seasons, including twelve years when Matt served as the primary caregiver at home. He enjoys helping pastors and families think biblically about faith, work, and everyday obedience. Learn more at rolereversedparents.com.

If you read Pastor’s Wallet regularly, you’re used to thoughtful, practical guidance on budgets, housing allowance, benefits, and the financial realities of ministry. Today, I want to take a slightly different angle. This reflection still concerns money, but more specifically, a passage of Scripture that often weighs heavily on pastors’ consciences when finances at home do not look the way they expected.

Pastoral ministry is demanding in ways many of you understand firsthand. Long hours, emotional weight, spiritual responsibility, and modest pay remain realities most pastors accept early on. Many of us also accept our families may need to make financial adjustments in order for us to serve faithfully.

In recent years, one adjustment has become increasingly common: pastors’ wives working outside the home, sometimes earning more than their husbands. A 2017 Lifeway study found more than half of pastors’ wives work outside the home, and many contribute most of their household income. For some pastors, this reality creates quiet discomfort. For others, it produces guilt. For a few, it raises a deeper question: Am I failing to obey Scripture if I’m not the primary earner?

That question almost always circles back to one verse: 1 Timothy 5:8, where Paul warns anyone who does not provide for his relatives “has denied the faith and is worse than an unbeliever.” It is a serious verse and one that deserves careful reading.

What Problem Is Paul Actually Addressing?

First Timothy 5 is not a discussion about employment patterns or marital roles. It addresses widows and responsibility within the church. Paul corrects a specific problem: believers neglected vulnerable family members and shifted responsibility onto the church.

Throughout the chapter, Paul defines who qualifies as a “widow indeed,” distinguishes between those who need ongoing support and those who can care for themselves, and clarifies when the church should step in. His concern is not who earns the paycheck. His concern is ensuring no one is abandoned.

When Paul speaks sharply in verse 8 about “providing,” he confronts those failing to care for members of their own household, especially widows who depended on family support. Such neglect, Paul says, is worse than unbelief because even the surrounding unsaved world understood families bear responsibility for their own.

A Shared Responsibility, Not a Gendered One

What often goes unnoticed is Paul applies this responsibility to both men and women. Just a few verses later, in 1 Timothy 5:16, believing women receive instruction to care for widows in their families so the church is not burdened.

The language shifts slightly. Men receive instruction to “provide.” Women receive instruction to “care” or “assist.” The responsibility, however, does not change. Paul does not assign different kinds of provision based on gender. He describes one obligation using overlapping terms. To provide is to ensure care. To care is to assist. Both point to the same goal: ensuring no one in the family lacks help.

Here, many assumptions begin to unravel. Scripture does not limit provision to income alone. Financial support may be part of it, but provision also includes presence, management, advocacy, protection, and daily labor on behalf of others.

What This Means for Pastors Today

Before I ever stayed home with my children, I already held conviction Scripture allowed freedom in how families live out the call to provide. I did not want to step into a role that violated God’s Word. As I understood passages like 1 Timothy 5, Scripture pointed clearly toward responsibility rather than a single economic model.

For some pastoral families, faithfulness looks like the husband earning more. For others, faithfulness looks like the wife doing so. In many churches today, gifted and capable wives help stabilize family finances so their husbands can remain in ministry. This reality reflects shared obedience, not failure.

In our own family, provision has taken different forms across different seasons. At one time, it looked like me serving as a stay-at-home dad, acting as caregiver, household steward, and consistent presence while my wife pursued the work outside the home God placed before her. At other times, we both worked outside the home and shared care for our daughters and household equally. We also experienced seasons when my wife served as a traditional stay-at-home mom and I was the only one working outside the home. In every season, guided by the Lord, our aim remained the same: ensuring no one in our family lacked care.

Paul’s concern in 1 Timothy 5 is not whether a pastor earns less than his wife. His concern focuses on whether anyone under his family care experiences neglect.

Freedom Where Scripture Gives Freedom

Over time, I have become less concerned with defending particular family arrangements and more concerned with helping fellow pastors and believers read Scripture carefully. When we import expectations into the text, like some do in 1 Timothy 5, we risk binding consciences where God has given freedom. Unity in the church does not require identical family structures. It requires humility, careful interpretation of Scripture, and willingness to allow freedom where God has not issued commands.

For pastors who quietly wonder whether their paycheck disqualifies their faithfulness, 1 Timothy 5 offers relief rather than condemnation. The passage does not demand earning more than one’s wife. It calls husbands and wives to ensure genuine care for those entrusted to them.

That, in the truest sense, is what it means to provide.

4Comments

What To Do If Your Clergy Housing Allowance Exceeds Your Actual Expenses

by Amy Monday, March 2, 2026

Picture of blue couch against a white wall with blog post title: What To Do If Your 2018 Clergy Housing Allowance Exceeded Your Actual Expenses

You were going to replace your fence, but then you didn’t. You were going to buy that new sofa, but then you didn’t. You were going to move to a more expensive place, but then you didn’t. Life doesn’t always go as planned, does it?

While altering your plans can be annoying, it is more significant for pastors when it comes to housing expenses. At the beginning of the year, you have to carefully estimate your yearly housing expenses in order to avoid paying taxes on them with the clergy housing allowance. You meticulously calculate your anticipated rent, utilities, home purchases, and big projects.

And then life happens. Plans change. Things don’t go as expected, and your eligible housing expenses are lower than the housing allowance that your church gave you. You should have been paying taxes on some of that money, and you didn’t.

Now, what do you do?

Excess Housing Allowance Is Taxable Income

What the housing allowance is is a provision that allows you to exclude your housing expenses from gross income for federal tax purposes. At the beginning of the year, you tell your church how much of your income you plan to use for housing and that amount is not reported to the IRS as income.

However, if you don’t use it all for housing by the end of the year, you need to let the IRS know and pay federal income taxes on the rest. Let’s see what that looks like in real life.

Say your church pays you $60,000 a year. You designate $25,000 of that as a housing allowance so your church only reports to the IRS that you had $35,000 of taxable income.

If you only spend $22,000 on housing for the year, you have an extra $3,000 that you should have paid taxes on but didn’t. You need to add that extra $3,000 of housing allowance back into your income and pay taxes on it. Not doing so is tax evasion and will get you into trouble if the IRS audits you.

How To Report Your Excess Housing Allowance

So, how do you report it as income in order to pay taxes?

Add it in with your other wages on line 1 of your Form 1040. Then, on the dotted line next to it, write, “Excess allowance” and the amount. Here is an example:

Picture of Form 1040 with "Excess Housing Allowance 3,000" written on line 1 for clergy.

Yes, it is as simple as that. Now it is added in with your wages for when your taxes are calculated.

If you’re using tax software, it should ask you for your designated allowance and actual expenses. A human tax preparer should do the same. If they don’t, then you might want to look into working with a tax preparer who specializes in helping clergy.

That’s how to include it for income taxes, but what about SECA, your Social Security and Medicare taxes? Well, you don’t have to worry about that at all. Because you always have to pay SECA taxes on your housing allowance, claiming too much won’t make any difference in what you have to pay. You are already paying the full amount on Schedule SE.

What You Can Do Differently For Next Year

Now, while ending the year with excess housing allowance may have made your heart skip a beat and worried you a bit, it wasn’t that bad, was it? With such an easy way to correct it, it’s often better to err on the side of claiming too large an allowance than too small.

Too many pastors don’t claim a large enough housing allowance and end up needlessly paying extra taxes. The best way to avoid that and limit your tax bill is by overestimating your yearly housing allowance.

There is one thing I need to note, though. There is a potential downside to overestimating your housing allowance.

Things To Watch Out For

Your housing allowance lowers your gross income for federal tax purposes and there are some important things that are limited by your gross income. The biggest one that most pastors need to watch out for is the refundable portion of the Child Tax Credit. Claiming too much of a housing allowance can actually limit the amount of money you can get. This article explains why. Contributions made to retirement accounts are also calculated and limited based on income. There is a chance that by overestimating your housing allowance you could negatively affect the amount of money that you can save for retirement.

Make sure to look into those two things before blindly following my suggestion that overestimating is better than underestimating. Remember, just because you read something on the internet doesn’t mean it’s necessarily best for your unique situation.

Now that you’ve fixed last year’s housing allowance, what about this year’s? Is it already approved by your church with an accurate estimate or overestimate?

If not, you’d better get on it! The housing allowance cannot be used retroactively, so every day you procrastinate is another day that you are paying taxes on your housing expenses unnecessarily. If you need to make a change, make one. The IRS does not limit the number of changes you make to your housing allowance or the timing of them, as long as they are done proactively.

Purchase The Complete Guide to the Clergy Housing Allowance by Amy Artiga

23Comments

Tax Preparation for Ministers: Reader Referrals

by Amy Tuesday, February 24, 2026

Clergy taxes are incredibly unique in a complex tax system, so it can be hard to find a tax preparer who actually understands how they work. I’m always getting requests for referrals, so I turned to my readers for help. These are the tax preparers that my readers have recommended. I have not personally worked with any of them and have done no research or due diligence, but they each have at least one happy pastor client.

Bret Willoughby, CPA
Yahr Income Tax
Vingroup
Stewardship Services Foundation
StartChurch
Clergy Advantage
Witmer Wood Tax Consultants
Master Plan Tax Services
Clergy Financial Resources
Connie Buskhol, CPA
Keller & Owens
Wooten CPA
Leeanne Stilley, Senior Tax Specialist, Small Business Certified (H&R Block), leeannepstilley@gmail.com
CrossTribe Advisory
Clergy Tax Team
Laurie Rust, CPA
Solomon Tax (English & Korean speaking)
Molly Shattuck, Centennial Tax
Kayla Schnell, Marcoe Tax Agency
For Missionaries: Wacek & Associates

The only way to get on this list is to be referred by a client. If you are a tax preparer who wants to be on this list, have one of your clients reach out to me. Also, if you reach out to someone on the list and find that they are no longer serving pastors, please let me know and I will update it.

9Comments

How Do You Report Your Clergy Housing Allowance To The IRS?

by Amy Monday, February 16, 2026

Picture of a woman on the telephone with blog post title: How Do You Report Your Housing Allowance To The IRS?

This is an excerpt from my book, The Pastor’s Wallet Complete Guide to the Clergy Housing Allowance:

The church is not required to report the housing allowance to the IRS. Unless a church includes it in an informational section on Form W-2, the IRS and the Social Security Administration (SSA) are only made aware of the housing allowance when a minister files Schedule SE to pay Social Security taxes under SECA.

Form W-2

You should review your Form W-2 that you receive every year to make sure your church prepared it correctly. Many church treasurers and bookkeepers have received absolutely zero training, they’re just doing it because they’re not good at saying no. So, make sure to double check. This is what it should look like:

Box 1

Wages excluding housing allowance. This is what the church reports to the IRS as your income. The housing allowance is exempt from income and should therefore not be reported here. If it is, the IRS will think you owe more in taxes and you will have a mess on your hands. If your church accidentally includes your housing allowance in Box 1, have them correct the mistake right away by filing an amended Form W-2.

Boxes 3, 4, 5, and 6

These boxes are for Social Security and Medicare and, regardless of the housing allowance, should be blank. That is because ministers are considered self-employed for Social Security purposes as we discussed already. It was in that exciting SECA/FICA excursus that you probably skipped. Don’t worry about it, it’s boring stuff, you can just take my word for it.

Again, your income is not reported for Social Security and Medicare purposes on Form W-2 and churches are not supposed to withhold payroll taxes for you. Rather, you have to calculate your own Social Security and Medicare tax payments on Schedule SE and file it with your tax return.

Box 14

Box 14 is for informational purposes only. As such, your church is allowed to use it to report the amount designated as a cash housing allowance. However, this is not required and some churches report it in other ways. If there is nothing in your Box 14, then you should expect other communication from your church regarding your housing allowance amount.

Box 16

Box 16 is for state wages and would be filled out as per your state’s laws.

Non-Employee Ministers

Ministers who are not employed by a specific church, such as traveling evangelists, will not receive a W-2. Rather, you may receive a Form 1099-NEC (Form 1099-MISC for tax years prior to 2020). Any church that has paid you over $600 in a year is required to issue you one. For them to be able to do so, you will need to submit Form W-9 to them prior to providing your services. Form W-9 simply contains the basic information they will need to be able to report your income to the IRS.

The $600 trigger does not include a housing allowance that was properly designated in advance, reimbursed expenses, or contributions to a 403(b). Thus, if you claim all of your income from a specific church as a housing allowance, they aren’t required to give you anything to show for it. It is up to you to track the income you receive from various churches and how much of it is eligible for the housing allowance.

Form 1099-R For Pension Distributions

Under certain circumstances, you may be able to claim a ministerial housing allowance even during retirement. The next chapter will discuss this in detail.

If you take a housing allowance during retirement, you will receive a 1099-R instead of a W-2. Your housing allowance may or may not be listed on the 1099-R. The form may just say “Taxable Amount Not Determined,” meaning that you have to decide which portion is taxable and which isn’t. If it is listed as a taxable distribution, you can still take it tax-free by including the housing allowance amount on line 4 of Form 1040. (Prior to 2018 it was on line 16.)

Housing Allowance Amount

Your church treasurer is responsible for providing you the amount of your annual housing allowance in writing at the end of the year. If you haven’t gotten one, try bringing the treasurer homemade brownies. They can really work wonders. A copy of the notification should also be kept in the church’s files.

Notification can simply be a letter stating something along the lines of, “Your designated cash housing allowance for 2018 was $…” This letter goes to the pastor and not to the IRS. It is for informational purposes only. It is not attached to the pastor’s tax return that is sent to the IRS, either. You’ll have plenty of other papers to send them, so keep this one for yourself.

Also, as mentioned above, the housing allowance amount can be included in Box 14 on Form W-2. Box 14 is an informational box that employers use to report various kinds of information to employees, such as retirement contributions and housing allowance. Box 14 would simply say something like, “Housing: 18,000.” If it is included on Form W-2 then it has been reported to the IRS.

You will need this information to fill out Schedule SE and pay your SECA taxes.

Your church will report to you the amount paid as a cash housing allowance. However, if you live in a parsonage it is your responsibility to calculate the fair market rental value and include it on Schedule SE. Since you are the one receiving the tax benefit, it is your responsibility to do the calculations, not your church’s. Go back to the last chapter to learn about how to calculate the fair market rental value of a home.

Housing Expense Records

It is your responsibility as a pastor to track your housing expenses. Your church has no responsibility in this area beyond designating the housing allowance. If you claim an erroneous amount or don’t have the records to back up your claims, it is all on you and has nothing to do with the church.

In fact, it’s really none of their business how you use the housing allowance. That’s between you and the IRS. There is no need for you to submit your itemized expenses to the church or share them in any way. They are confidential.

Some churches have curious board members, but you can let them know that there is nothing in the law that requires them to know how you are spending your housing allowance. Just be nice about it, because they’re the ones that have to designate a housing allowance for you in the first place! If it doesn’t go over very well, go ahead and take them some brownies, too.

As you can see, it is important that you keep your own records. Make sure to keep receipts, mortgage statements, and any other evidence that supports your claim of a housing allowance. These will come in handy if you ever get questioned by the IRS. In an audit, the thicker the paper trail, the better. Digital “paper trails” also work well.

33Comments

1. What Expenses Qualify For The Minister’s Housing Allowance?

This year’s top post is actually almost 6 years old. It’s an excerpt from my book about the housing allowance that I published right when I published the book back in 2020. I guess I was right in assuming this would be one of the most popular topics! It includes the list of what is eligible and isn’t eligible for the housing allowance, and an explanation of how to find out about things that aren’t on the list.

2. Your Top 10 Clergy Housing Allowance Questions Answered

Another oldie-but-goodie, this post is almost 3 years old. However, the tax law hasn’t changed, so it’s just as relevant and accurate today as it was when I wrote it. It’s a great overview of the clergy housing allowance with a lot of links to other articles for more in-depth study.

3. How the One Big Beautiful Bill Act Affects Pastors

I’ll be honest, this is the only brand-new blog post I wrote for Pastor’s Wallet this year. Due to my health (long covid is not fun!), I haven’t been writing, just updating old posts and inviting guests to write. But when a big tax bill passes, helping you understand it jumps to the top of my priority list. I mean, if I am a professional and find researching tax bills boring, I would hate to make you do it!

4. How Do You Report Your Clergy Housing Allowance To The IRS?

This is another excerpt from my book about the housing allowance. It covers a topic that most churches and pastors find intimidating. No one wants to make a mistake and get the IRS after them, and this article will help avoid that.

5. The Great Tax Benefits of 403(b) Plans for Pastors

Church-sponsored 403(b) plans are a wonderful tool for pastors to save on taxes while saving for the future—especially those who have not opted out of Social Security. I wish every church would offer one, so I asked financial planner Nate Skelly to share with you all of the great benefits available through a 403(b) plan.

6. Who Is Eligible For The Clergy Housing Allowance?

This article goes in depth with IRS definitions and quotes from the Treasury Department. It’s an important thing to understand, though I have to admit that there are still some gray areas where the answer is not clear.

7. Claiming A Minister’s Housing Allowance In Retirement

Here is another excerpt from my book about the housing allowance and something I help my financial planning clients do on a regular basis. I wish everyone would read this because, unfortunately, I still hear from pastors who have made irrevocable mistakes that disqualify them from claiming a housing allowance in retirement.

8. How Much Housing Allowance Can A Pastor Claim?

This is another popular question and our most popular blog post of all time. It’s an important one to read because there is a lot of incorrect information out there about it, even from professionals like CPAs.

9. Should You Keep A Mortgage Just For The Housing Allowance & Mortgage Interest Deduction?

This is a post that I updated this year that answers an incredibly common question. Since there isn’t an easy, one-size-fits-all answer, I provide some examples with calculations and a list of factors to consider.

10. How Pastors Can Find Free Getaway Lodging for Sabbaticals or Vacations

This is a guest post from a pastor just like you who was doing his own personal research to see if he could get away without breaking the bank. He put so much time and effort into it that he wanted the rest of you to benefit from it as well and offered to share it with my Pastor’s Wallet readers. Thank you, Jon Neal!

Thank you for your ministry and support in 2025. I pray that 2026 is a year full of blessings for you and your family!

0Comment

All Posts By Amy