Churches can designate a housing allowance only prospectively, not retroactively. In other words, the church must designate the housing allowance before the minister earns the income on which the church designates the housing allowance. Churches should ask their ministers for help in estimating how much the minister plans to spend. Remember that the church, not the minister, must designate the allowance.
For more information, visit GuideStone.org/TaxGuide