As a church leader or administrator, you’re constantly looking for ways to support your ministry staff both spiritually and practically. One potentially effective method that can make a significant difference is adopting a Housing Allowance Resolution. This not only benefits your ministry staff but also helps ensure that your church is aligning with specific tax laws. Let’s explore how this works and why it’s a smart move for your church.

Understanding the Housing Allowance Resolution

The essence of the Housing Allowance Resolution lies in providing a non-taxable housing allowance to your ministry staff. Under tax laws, ministers are allowed to exclude from their gross income a housing allowance paid as part of their compensation, provided it’s used for housing expenses and doesn’t exceed the fair rental value of their home.

Here’s a framework your church can use:

1. Formal Adoption: The resolution should be formally adopted during a board meeting, ensuring a quorum is present. This legitimizes the decision and embeds it into the church’s official records.
2. Clear Explanation: It’s important to state clearly in the resolution that this is in compliance with tax laws, specifying that it applies to a “minister of the gospel.”
3. Specification of Terms:
   • The resolution should specify that the minister can designate an amount (up to 100% of their compensation) as a rental/housing allowance.
   • It’s crucial to note that this allowance is part of the minister’s total compensation from the church for services related to the ministry.
   • The resolution should remain effective until amended or rescinded, providing long-term clarity and stability.

Why Adopt This Resolution?

1. Financial Support for Ministry Staff: This resolution is a tangible way to support your ministry staff financially. It helps them manage their housing costs more effectively, which can be a significant portion of their expenses.
2. Tax Benefits: By excluding the housing allowance from the minister’s gross income, it provides a tax advantage. This means more of their compensation goes directly to meeting their needs rather than to taxes.
3. Compliance with Tax Laws: Adopting this resolution demonstrates your church’s commitment to compliance with tax regulations, which is crucial for maintaining your church’s integrity and public trust.
4. Simple Yet Effective: This is a relatively straightforward measure that can be easily implemented but has a substantial impact on your staff’s wellbeing.

In Conclusion

Adopting a Housing Allowance Resolution can be a wise decision for any church. It helps support your ministry staff in a very practical way, ensures compliance with tax laws, and reinforces the responsible financial stewardship of your church. By following the framework outlined above, you can help provide a potential significant benefit to your staff, allowing them to focus more on their ministry work without the undue stress of housing expenses. Remember, a church that takes care of its leaders is one that builds a strong, supportive community for everyone involved.