An ordained Pastor at CHPC may designate a portion of his/her compensation as housing allowance, which is exempt from federal/state income tax liability. The portion of the pastor’s compensation that is not designated as housing allowance is subject to federal/state income tax liability.
 
The following outlines expectations and agreements in the designation of compensation as annual housing allowance by a CHPC Pastor.

• CHPC Session approves a Pastor’s housing allowance (Internal Revenue Service Code Section 107) as an ordained, licensed, or commissioned minister of the Gospel, based upon the Pastor’s good faith estimate of his/her housing expenses.
• The stipulated amount of housing allowance will be exempt from income taxes to the extent the amount is used to provide for qualified housing expenses and the amount does not exceed the fair rental value of the home.
• The Pastor should maintain personal records to substantiate the exemption. Consulting a tax adviser is advised.
• The Pastor is responsible for the accuracy of the designated housing allowance.
• A housing allowance is based on estimates of housing‐related expenses such as mortgage payments, utilities, repairs, furnishing, insurance, property taxes, and maintenance that in total do not exceed the fair rental value of the home.
• The pastor will be obligated to pay federal/state income taxes on any amount of housing allowance designated in excess of actual expenses.
• Housing allowances must be designated in advance and cannot be designated retroactively.
• Housing Allowance forms must be updated annually (January 1st) per IRS regulation. Failure to do so prevents the pastor from claiming Housing Allowance for that calendar year.
• Human Resources will request Housing Allowance forms be complete and returned by December 1st for the following calendar year. This allows enough time for adjustments, approvals, and processing.