Faithful Stewardship of Your Housing Benefit

The Minister’s Housing Allowance

allows credentialed ministers to exclude certain housing-related expenses from taxable income. This can significantly reduce your tax burden and free up resources for both present and future needs.

If you are an active or retired minister, a portion or all of your annual pension may be designated as available for housing allowance, pursuant to Internal Revenue Service Ruling 75-22. However, the amount actually excludable as housing allowance cannot exceed the lowest of these factors:

  • The fair rental value of the furnished home plus the cost of utilities, furnishings and maintenance; or

  • The actual expenses of operating a home; or

  • The amount designated by WPF as a housing allowance.

-Any excess over the lowest of these factors is reportable as additional income for income tax purposes.

-The Board of Pensions has authorized the designation up to 100% of retirement benefits as a housing allowance paid as part of a retired minister’s compensation for past years of service.

-As a retired minister, pension distributions are not subject to SECA tax.

-To report such a designation, WPF recommends you use a self-prepared schedule and keep it for your records.  (See 1099-R form explanation in the “Forms” section above.)

-To review the latest housing allowance information, please see the Minister’s Tax & Financial Guide.