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.


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.