Each year the Church Board must pass a resolution establishing a dollar amount for the housing allowance. Here is a sample resolution to use when the pastor owns their own home.
The following resolution was duly adopted by the board of directors of Second Baptist Church at a regularly scheduled meeting held on December 15, 2010, a quorum being present:
Whereas, ministers who own their home do not pay federal income taxes on the amount of their compensation that their employing church designates in advance as a housing allowance, to the extent that the allowance represents compensation for ministerial services, is used to pay housing expenses, and does not exceed the fair rental value for the home (furnished, plus utilities); and
Whereas, Pastor Jane Smith is compensated by Second Baptist Church exclusively for services as a minister of the gospel; and
Whereas, Second Baptist Church does not provide Pastor Jane Smith with a parsonage; therefore it is hereby
Resolved, that the total compensation paid to Pastor Jane Smith for calendar year 2011 shall be $50,000, of which $15,000 is hereby designated to be a housing allowance; and it is further
Resolved, that the designation of $15,000 as a housing allowance shall apply to calendar year 2011 and all future years unless otherwise provided.