Designating a Housing Allowance from a 403-b

If your 403b is with a religious annuity board like GuideStone Financial Services or Envoy Financial, they will designate your housing allowance for you.  If your 403b is with a secular investment agency such as Vanguard, Fidelity, TD Ameritrade, etc. then include the following in the business meeting minutes of the church or board:

According to the provision in income tax law, a retired minister of the Gospel is not subject to federal income tax on ministerial retirement distributions designated as housing allowance to the extent that it is used to provide a home.

Resolved that Pastor ____________ is to receive 403-b distributions for the year 20___.  100% of this amount is hereby designated as housing allowance.

Resolved that as long as Pastor ____________ is receiving 403-b distributions 100% of these distributions will be designated housing allowance for all future years until modified.

Date_______________
Signature_________________________

The names of the individuals making the motion and seconding it should be included.  You can designate 100% of the distributions as housing allowance, but the housing allowance is always limited to out of pocket costs in providing a home.  The housing allowance designation should be renewed in writing each year.

Note:  For IRS documentation regarding designating a portion of a minister’s pension as housing allowance refer to IRS Publication 517 (page 8, “Retired Ministers”).

 
Attention: Tax Law is subject to interpretation. Please be advised that the material contained on this Web site is for information only and is not intended to be a substitute for professional legal advice. The Stewardship Services Foundation endeavors to update the information on this site on a regular basis, but cannot guarantee its accuracy at all times.