Minister Housing Allowance and SS

[thomtax]

A minister wants to begin drawing social security at age 62. There are limits as to how much can be earned without giving up part of ss benefits.

Does anyone here know if the housing allowance will count toward this limit? Or will it just be the salary part? Since SE tax is paid on the ha, I have mixed thinking.

Thanks.
LT

[veritas]

I would say

if the minister is still performing services for a church and the housing allowance is paid for such it is earnings from self-employment and counts towards the income limits.

Ministers can designate some church retirement pensions as housing allowance and is not considered self-employment income.

[Black Bart]

I can't find a thing on it.

If you type in "housing allowance..." everything afterwards that the search pulls up is limited to the exclusion from income and it won't look for the part about "excess earnings." To get a definitive answer I'll bet you end up having to call the SS office tomorrow (unless you get lucky here with a smart insider).

[MAMalody]

The best available evidence would lead one to believe that the housing allowance should be included in the annual earnings test. It is interesting to note that the IRS, the SSA nor the courts have ever addressed this issue directly.

Mike

[Corduroy Frog]

Two Factors

1) Make sure the preacher has not bailed out of the SS system by filing a Form 4361 earlier in his life. Surely you wouldn't have posed this question if this is the case. However, the only reason I bring it up is because one of my preachers filed Form 4361 over 40 years ago, and in the meantime he founded a landscaping company to work during the week. Even though he had bailed out of SS early on, he STILL had to pay self-employment tax on his landscaping earnings.
2) He is supposed to receive an earnings statement within 3 months of his birthday every year. You might ask him for this. The statement shows social security earnings, not income subject to tax. If his taxes have been filed correctly all these years, the social security statement should have earnings which include the housing allowance. If this did not happen, my presumption is that only three years can be re-filed due to statute.

[thomtax]

Thanks everyone

Yes he does pay ss on everything and it is currently included. For this reason, I suspect that it will all have to be used to see if he is overpaid if he begins taking ss at age 62.

I guess that on Monday, I will call to see if anyone will give me an answer or if I will get a run around.

Again, thanks for the thoughts.

LT