Housing Allowance Worksheets

A minister’s housing allowance must be officially designated by the church or parachurch. The designation should be stated in writing, preferably by resolution of the top governing body, in an employment contract, or, at a minimum, in the ministry budget, the budget should be formally approved by the top governing body of the ministry.

Tax law does not specifically say an oral designation of the housing allowance is unacceptable. In certain instances, the IRS accepted an oral housing designation. Still, the use of a written designation is preferable and highly recommended. The lack of a written designation significantly weakens the defense for the housing exclusion upon audit.

The housing allowance must be designated prospectively by the church. Cash housing allowance payments made prior to a designation of the housing allowance are fully taxable for income tax purposes.

The housing allowance worksheets can be used by ministries to officially designate the housing allowance.

Click here for housing worksheets for ministers who own their own home and those who live in parsonage housing.

 


This text is provided with the understanding that ECFA is not rendering legal, accounting, or other professional advice or service. Professional advice on specific issues should be sought from an accountant, lawyer, or other professional.

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