Setting the 2027 Housing Allowance: The December Designation
Only an amount designated in advance of payment can be excluded (Pub. 517). Most churches adopt next year's designation at the December board or council meeting. A designation made after the money is paid doesn't count, and informal conversations aren't a designation.
Picking the amount
- Add up what you spent this year on rent or mortgage payments, property tax, insurance, repairs, furnishings and utilities.
- Scale it to a full year if you're working from part of the year, and add known changes — a new roof, a rate increase.
- Leave a margin: designating more than you spend just makes the excess taxable, while designating too little can't be fixed after the fact.
The resolution
Record the amount, the minister, the year and that it's designated as a housing allowance, in the minutes. The exclusion is still limited to the smallest of the designation, actual costs and fair rental value, and to reasonable pay for your services.
Last reviewed 2026-10-28. General information, not tax advice. Your tax adviser can tell you what applies to you.