Ministers are eligible for housing allowance with respect to ministerial services they provide. The Internal Revenue Code does not contemplate that one person can receive housing allowance based upon another person’s service. It would appear unlikely that a surviving spouse could receive housing allowance that is attributable to ministerial service of the other person. But a surviving spouse who is a Minister for Tax Purposes may be eligible to receive housing allowance with respect to their own ministerial service. Surviving spouses should seek legal or tax advice before asking GuideStone to designate a housing allowance on their income.
For retirement distributions from a 403(b) or 401(k) plan — including the Church Retirement Plan — housing allowance is shown below Copy C of your Form 1099-R. (If you are receiving disability protection income, it is reported on a Form 1099-MISC. Housing allowance is not shown on the 1099-MISC; however, a separate letter will include the housing allowance information.) If you are receiving deferred compensation income, it is reported on a Form W-2. While the W-2 does not show housing allowance, it is deducted from the gross income reported.
It is important to note that regardless of what your tax forms indicate, you are responsible for reporting the correct amount of income on your tax return, even if that amount differs from what is shown on the 1099-R.
For more information, visit the Ministers' Tax Guide