Instructions for Completing Pastoral Compensation Forms (5, 6, and 7)
Minnesota Annual Conference of The United Methodist Church
2015 Church Conference Forms
Conference Office: (612) 870-0058
*When completed, this form needs to be sent to your district office.
Please share the information on this form with your Church Treasurer.
If you need assistance in setting your pastor’s compensation or completing these forms, please contact your
district office.
Please complete separate Pastoral Compensation forms for each appointed clergy (elder, deacon, probationary
member, member of other denomination or licensed pastor) to this charge. If your pastor serves a multiple
point charge, please fill out the total compensation from all charges on Forms 5 and 6, and then include the
breakdown for each church on Form 7.
Effective 1/1/2016 there are new CRSP (pension) and CPP (death & disability) fixed amounts and maximum
calculations, these forms reflect the changes. Please use the enclosed forms for the compensation year 2016
and do not use the prior year forms as they will not accurately calculate the costs for the 2016 year.
Auto-calculating form available in Excel format
The Excel format version of the Pastoral Compensation forms will automatically calculate the parsonage
penalty adjustment, church and clergy share of MAC premiums, pension, disability, and total the different
sections of forms 5 and 6. If the appointment is to multiple churches, form 7 will allow you to enter the
percentage for each church then automatically calculate the amounts from forms 5 and 6 for each item. This
format works well for appointments without special circumstances. We hope you give it a try.
Note: The Excel format will not work for certain situations, such as appointments of clergy couples where both
appointments pay a portion of the family MAC premium, and appointments without pension and disability
benefits (retired supply clergy, clergy who waived pension benefits). It is suggested to use the Word version
for these types of appointments.
Information needed to complete the Clergy Compensation Forms:
Clergy Name
Years of Service
Church(es)
Appointment increment – In quarter increments (fulltime = 1, ¾ = .75, ½ = .5, and ¼ = .25)
Salary
Salary reductions - (Pastor must complete election forms for SelectAccount each year. If changing the UMPIP
election completion of the Before-tax and After-Tax Contribution Agreement form is required.)
Housing Allowance – leave blank if parsonage is supplied
Reimbursable amounts – Continuing Education, Travel, and Other Professional expenses
Budget amount for parsonage utilities (this only applies when a parsonage is provided)
Multiple church appointments will need the percentages paid by each church. If the breakdown is not by
percentage, use the Word Format instead.
Form 5 Pastoral Compensation Instructions by line:
Start by entering the following information where indicated: church name, city, clergy name, years of service,
appointment increment and effective date for the compensation form.
Instructions for Completing Pastoral Compensation Forms (5, 6, and 7)
Line 1a) Pastor’s Salary - Minimum Salary Requirements: Consult the Equitable Compensation Schedule
enclosed for determining the years of service of the clergy person and the required minimum base
compensation. You may pay more than the minimum required. In the SPRC Training Manual, there are
suggestions for setting clergy compensation.
Line 1b) Parsonage Penalty Adjustment: (Only added for active clergy who receive a parsonage for their
housing and receive pension benefits) Legislative item 504 approved at the 2011 Annual Conference Session
added the parsonage penalty adjustment to the clergy compensation form and compensation calculation. This
adjustment is designed to offset the pension penalty of pastors who reside in parsonages. Each year the
penalty adjustment will be calculated by the Benefits Officer using the average housing allowance of fulltime
Minnesota appointments and average parsonage value (25% of salary). The fulltime parsonage penalty
adjustment calculation is: 3% of the difference between the average housing allowance and average parsonage
value. For less than fulltime appointments with a parsonage the penalty adjustment will be the incremental
proportion of the appointment to the fulltime penalty adjustment, 75%, or 50%.
2016 Parsonage Penalty Adjustment amounts are:
Fulltime appointment = 283.00
¾ time appointment = 211.50
½ time appointment = 141.00
¼ time appointment = 0.00 (not eligible for CRSP pension effective 1/1/2014)
Note: Clergy waiving participation in the UMC pension plan or retired clergy serving an appointment are not
eligible to receive the Parsonage Penalty Adjustment. Effective 1/1/2014 ¼ time appointments are not eligible
to participate in the CRSP pension plan per changes to the plan by General Conference 2012.
Line 1) Total Salary: Add lines 1a and 1b.
Line 2) Housing Allowance: For churches that provide a housing allowance in lieu of providing a parsonage.
The amount is determined when an appointment begins or when a pastor moves from a parsonage to a
housing allowance. It should not change from year to year unless there is an increase in utility costs. Even if the
amount of the cash housing allowance does not change, a new housing allowance declaration is required when
there is an appointment change. The housing allowance declaration of the previous pastor does not apply to
the new pastor and the new pastor’s housing allowance declaration from the previous church does not apply
to the new appointment. The pastor may choose to shift more of their salary into their housing allowance for
tax purposes, by using the Housing or Parsonage Allowance Resolution (sample forms are numbered 8a and
8b) with approval by the church or charge conference, and reporting the furnishing/appurtenance amount on
line 3(3) of salary reductions. Keep the approved Housing Resolution with the church conference minutes.
Lines 3 and 3a) Salary Reductions and Net Salary: Once the base cash compensation is determined, the pastor
may choose to participate in voluntary salary reductions to;
(1) United Methodist Personal Investment Plan (UMPIP), (enrollment or change form required)
(2) Other 403(b) plan (not UMPIP) not recommended due legal requirements for the local church
(3) Furnishing/Appurtenance Allowance, (Resolution must be approved by church or charge
conference)
(4) Clergy Share of MAC Premium (10%) – mandatory if participating in MAC Plan
(5) Flexible Spending Account: Medical and Dependent Care Reimbursement (IRC 125)
(SelectAccount Plan enrollment form required annually)
Please note: The amounts listed as reduction do not complete the process, enrollment forms are necessary.
Instructions for Completing Pastoral Compensation Forms (5, 6, and 7)
Line 3a) Total Salary Reductions: Add line (1) thru (5) for total salary reductions.
Line 3) Net Salary: Calculate: Total Salary (1a + 1b same as line 1) + Other non-MAC(line 4a) – Total Salary
Reductions (line 3a) = Net Salary The net salary equals the amount in Box 1 of the W2 if there are no changes
during the calendar year.
The 2016 contribution limits to 403(b) plans have not been released by the IRS at this time, the limits are
indexed to inflation and will be announced by the IRS in the fourth quarter of 2015.The 2015 maximum
contribution limits to 403(b) plans are $18,000 for taxpayers under age 50, and an additional $6,000 catch-up
option for taxpayers 50 and older. Each situation is unique, so please consult your tax advisor.
Line 4) Health Insurance: The 2015 MAC Plan premiums were determined at the September 15, 2015
Conference Board of Pension and Health Benefits meeting. The “conference share” for active clergy and lay
employees will be funded from MAC Plan reserves. Automatic withdrawal is available and does save the
church money. It is mandatory for elders and provisional elders who are appointed full or ¾ time to be on the
conference plan.
In previous years there were percentages used for church, clergy and conference premium amounts. Due to
the Affordable Care Act’s W2 reporting requirements, the Conference Board of Pension and Health Benefits is
deducting the “conference share” (funded from MAC Plan reserve in 2016), before calculating the church and
participant costs for active clergy and lay employees. There is no increase to costs from 2015 to 2016.
Line 4a) Other non-MAC health insurance contribution (taxable): If the appointed pastor is not required to
participate in the MAC Plan and the church allocates funds for non-MAC insurance. This amount is taxable to
the clergy.
Line 5) Pension (CRSP) and Death & Disability (CPP or UNUM) coverage: General Conference 2012 approved
changes to the CRSP and CPP programs.
Pension Compensation: Compensation used to calculate pension and death & disability programs.
Parsonage provided - Total Salary (line 1 which includes Salary + Parsonage Penalty
Adjustment) X 1.25 = Pension Compensation
Housing Allowance provided – Total Salary (Line 1) + Housing Allowance (Line 2) = Pension
Compensation
Pension (CRSP) – Defined Benefit: Based on appointment increment
2016 CRSP Defined Benefit costs are:
Fulltime appointment = $5,383.32
¾ time appointment = $4,037.52
½ time appointment = $2,691.72
¼ time appointment = $0.00 (not eligible for CRSP pension effective 1/1/2014)
Pension (CRSP) – Defined Contribution: Pension Compensation X 2%
Disability (CPP): Fulltime Appointment calculation only: Pension Compensation X 3% with a maximum of
$4,039.98
Disability (CPP): Less than Fulltime Appointment for (FE, PM, PE, AM, FD, PD)
Set amount based on appointment increment - ¾ time = $2,289.32; ½ time = $2,962.65
Disability (UNUM): ¾ time appointments for Local Pastors(LP) and Clergy from other denomination (OF)
Contact Benefits Officer at jean.edin@minnesotaumc.org for estimated premium
Pension & Disability TOTAL: Total of all CRSP, CPP and UNUM lines.
Instructions for Completing Pastoral Compensation Forms (5, 6, and 7)
The CRSP, CPP and UNUM premiums are paid by the church, and are billed by the Minnesota Annual
Conference. The UMPIP is a voluntary 403(b) participant contribution program by salary reduction. If your
pastor has elected to contribute to UMPIP the lead church will be billed separately by the General Board of
Pension, and is to be paid by the church from monies withheld from the pastor’s salary.
Line 6) Total Compensation for this Position: Total of lines 1, 2, 4, 4a, and 5
Less than full-time appointments: Adjustments are made to salary, housing, pension, and possibly health
insurance for less than full-time appointments. Please be in conversation with your district superintendent
about your particular situation.
W-2 reporting update: Health care reform and W-2 reporting information:
(From the General Board of Pension and Health Benefits website)
Background
The Patient Protection and Affordable Care Act (PPACA) requires employers to report the aggregate cost of
employer-provided health care coverage on employees’ Forms W-2. As posted previously, Notice 2010-69
issued in October 2010, made this requirement optional for all employers for the 2011 tax year Forms W-2
(furnished in January 2012).
Final Regulations
On February 12, 2014 the Internal Revenue Services (IRS) published final regulations concerning the
Employer Shared Responsibility Rule of the PPACA. The Final Rule gives “mid-sized” employers with 50 – 99
full-time equivalent employees (FTEEs) an additional year to comply with the Employer Mandate. Under
the Final Rule, mid-sized employers are not subject to the Employer Mandate until January 2016. Large
employers with 100 or more FTEEs must comply with the Employer Mandate by January 2015. Most small
employers with fewer than 50 FTEEs remain exempt from the Employer Mandate.
For more specific information on the PPACA visit www.gbophb.org under Center for Health, Health Care
Reform or
http://www.gbophb.org/center-for-health/services-and-programs/healthcarereform/audience/
Taxable Income and W-2s: Not all the items on Form 5 are considered taxable income. The housing allowance,
furnishing allowance, and fair market value of a parsonage provided to a pastor are not taxable income for
income tax purposes and are not included on a W-2. These amounts are subject to social security tax (SECA)
which the clergy reports and pays. Health and pension benefits are not subject to either income tax or social
security tax. For guidance on completing W-2s, please consult the most recent Tax Packet & Tax Information
provided by the General Council on Finance and Administration. It is available on their web site
(www.gcfa.org).
Other Pastoral Compensation Information:
Form 6 - Accountable Reimbursements
A pastor must submit a receipt, invoice, or mileage log within a reasonable time for reimbursement of these
items. The church sets an annual budget for continuing education, mileage, and professional expenses,
meeting the conference minimum guidelines and the amounts are paid out when expended or invoiced. They
cannot be paid as a monthly allowance. Nor can any unused portion of the fund be paid out to the pastor at
the end of the year. To do so may cause the entire reimbursement plan to be taxable. Neither can an
accountable reimbursement plan be set up as a salary reduction. These are funds provided in addition to the
Instructions for Completing Pastoral Compensation Forms (5, 6, and 7)
salary. Mileage is paid at the IRS rate, and does not include commuting between the home/parsonage and
church.
Form 7 - Multiple Church Compensation and Other Expense Breakdown
Using the totals from Forms 5 and 6, list the separate churches in the charge and their corresponding percent
of compensation and expenses then calculate each line item. Be sure to add both across and down to verify
totals.
Average Compensation
The Denominational Average Compensation (DAC) for 2016 is $67,333. The Conference Average Compensation
(CAC) for 2016 is $62,752. These numbers are calculated by the General Board of Pension and Health Benefits
and are based on cash salary plus housing allowance or parsonage value (25 percent of salary).
Social Security Tax
Clergy are in the unique position of paying the employer and employee share of the social security tax on both
their salary and housing. Some churches, in recognition of that, seek to give their pastor a social security
allowance that is considered taxable income and must be reported on the W-2. A clergy may choose to have
voluntary withholding of income taxes from their paycheck, including an extra amount withheld to cover the
amount due in social security tax, and the church would send the tax withholdings to the IRS with their other
payroll taxes and report it on the clergy’s W-2. However, the church cannot directly pay the employer share of
FICA/SECA to the IRS for the clergy.
Forms 5, 6, and 7 must be in the district office by December 1, 2015!
Modification to Clergy Retirement Security Program effective 1/1/2014 by General Conference 2012
The CRSP defined contribution (DC) was modified from the 3% non-matching contribution to a 2% nonmatching contribution with a 1% matching contribution. If the clergy makes personal contributes of 1% or
more to the United Methodist Personal Investment Plan (UMPIP) they will earn a 1% CRSP DC matching
contribution.
The 2016 funding of the matching contribution will be from pension reserves of the Minnesota Annual
Conference and not charged to the local church. The Conference Board of Pension and Health Benefits
(CBOPHB) approved the 2016 CRSP DC matching contribution funding to encourage all appointed clergy to
participate in the UMPIP program at or above 1% to receive the CRSP DC matching contribution without
adding cost to the local church. The CBOPHB will review this funding option each year.
Instructions for Completing Pastoral Compensation Forms (5, 6, and 7)
Equitable Compensation Schedule for 2016
The minimum base compensation for 2016 is defined as the 2015 base compensation plus the Cost Of Living
Adjustment (COLA) used by the federal government for the year we are in (that is, the Cost Of Living
Adjustment announced last October for 2015 SSA, which was 1.7%).
In addition there is a step increase of $700 for years of service for the first 8 steps. In keeping with our ongoing
policy, the first step normally begins on January 1 following 18 months of service in the Minnesota Annual
Conference.
Base $36,349
1
37,049
2
37,749
3
38,449
4
39,149
5
39,849
6
40,549
7
41,249
8
41,949
In considering additional compensation beyond these steps noted above the Staff/Pastor–Parish Relations
Committee is encouraged to consider the announced Cost Of Living Adjustment and merit increases in their
mutual negotiation with the pastor.
Further, this proposal does not intend to reduce current compensation levels recommended by Staff/Pastor
Parish Relations Committees and approved by the Church/Charge Conference during the ongoing tenure of a
pastoral appointment.
Further, in recognition of the financial realities and to allow for flexibility in the appointment process,
exceptions to above equitable compensation policy can be approved by a ¾ vote of the Cabinet and the
voluntary consent of the pastor involved.
Seniority for clergy from other denominations and communions who have had their orders recognized by the
Minnesota Annual Conference shall have their seniority status established by the Cabinet before their first
appointment in the Minnesota Annual Conference. The Cabinet is urged to consider years of service in the
ministry exercised in other denominations, especially those coming from the churches of the Commission on
Pan-Methodist Cooperation and Union and other member churches of the Churches Uniting in Christ (See
¶625.10 in The 2012 Book of Discipline).
Each year the Equitable Compensation Team is to submit this legislation for Annual Conference action.
2015 Minimum Compensation Schedule
Years of Service Calculation for Equitable Compensation Salary increments
A.
B.
C.
D.
E.
Budget Year
Year pastor began full-time service in The United Methodist Church
Subtract Line B from Line A
Subtract 1 year (to allow for Entry Level period)
Pastor’s increment (if 0, use Entry Level period; if 9 or greater, minimum compensation is the
greater of the 8th increment or the current Salary)
A. 2016
B.
_________
C.
_________
D.
–1
E.
_________
Monthly billing for pensions is 1/12 of the Line 5 Pension & Disability TOTAL.
For example, a fulltime appointment at the DAC level, the monthly billing would look like this:
Example 2016 CRSP and CPP calculations:
Compensation (DAC) = $67,333 (salary + housing value + parsonage penalty adjustment if applicable)
Pension (CRSP) Defined Benefit
Fulltime From table = $5,383.32
Pension (CRSP) Defined Contribution = $67,333 X 2% = $1,346.66
Disability (CPP)
= $67,333 X 3% = $2,019.99
Total CRSP and CPP
= $8,749.97
Monthly Pension (CRSP) =
Monthly Disability, (CPP) =
Total of CRSP and CPP =
$560.83
$168.33
$729.16
($5,383.32 + $1,346.66)/ 12 months
($2,019.99 / 12 months)
2016 MAC Plan Premiums for Active Clergy and Lay Employees
(monthly & annual amounts)
Church Payment
By ACH
Monthly Annually
Church Payment
Not ACH
Monthly Annually
Clergy Portion
Monthly
Annually
ACTIVE CLERGY - ¾ to fulltime appointment – elders mandatory participation
Single coverage,
clergy*
Family
coverage,
clergy*
LAY Employees
Single
coverage, lay
Family
coverage, lay
594.80
1,255.75
7,137.60
604.80
15,069.00 1,275.75
7,257.60 74.30
891.60
15,309.00 157.00
1,884.00
The Local church is required to fund at least the same dollar amount for single coverage for
eligible lay employees as they fund for clergy single coverage.
Church Payment
Church Payment
Employee Portion
By ACH
Not ACH
Monthly Annually Monthly Annually Monthly Annually
594.80
7,137.60
Minimum Minimum
594.80 7,137.60
(Annual Amounts)
Clergy appointed ¾ to full time
Family—ACH
Total Premium
Church Portion
Clergy Portion
Conference Portion
Non-ACH—Church Portion
Local church
employee benefit
policy determines
Minimum Minimum Maximum Maximum church share, if
604.80
7,257.60
817.95
9,815.40 greater than minimum
stated in this chart.
604.80
7,257.60
74.30
891.60
2016 MAC Plan Rates
2015 MAC Plan Rates
15,069
1,884
MAC Plan reserves
15,309
15,069
1,884
MAC Plan reserves
15,309
7,137.60
7,137.60
891.60
MAC Plan reserves
7,257.60
891.60
MAC Plan reserves
7,257.60
16,953
16,953
Single—ACH
Total Premium
Church Portion
Clergy Portion
Conference Portion
Non-ACH—Church Portion
Lay employee
Family—ACH
Single—ACH
Conference portion
for active (nonretired) participants
paid from MAC Plan
reserves in 2015
8,029.20
8,029.20
Church _______________________ City __________________________ Form 5
Pastoral Compensation
Return to district superintendent’s office by December 1, 2015
Clergy Name:
_____________________________________________________ Years of Service: ___________
Appointment increment (1, .75, .5 or .25)→
1a. Enter pastor’s salary (see 2016 Equitable Compensation Schedule)
1b. Parsonage Penalty Adjustment** (only if housing a parsonage)
1.
Eff. Date:
1a
1b
Total Salary (1a + 1b)
1
2. Housing Allowance in lieu of parsonage (IRC 107) (Form 8b required)
2
3. Salary Reductions (additional enrollment forms required; see instructions)
(1) Before-tax contribution to the Personal Investment Plan (UMPIP), a 403(b)
retirement plan
(2) Other 403(b) before-tax retirement plan contribution (not UMPIP)
(3) Furnishing/Appurtenance Allowance (IRC 107) (Form 8a or 8b required)
(4) Clergy share of MAC premium — mandatory
(5) Flexible Spending Account - Medical and Dependent Care reimbursement
(IRC 125) (Select Account enrollment required annually)
Total Salary Reductions
3a
NET SALARY (1 + 4a – 3a) Equals the amount in Box 1 of the W-2
4. Health Insurance (MAC Plan only) local church share.*
3
Enter: 1=Single, 2=Family, 0=none→
4a. Other non-MAC Plan health insurance contribution (taxable).
"X" here and enter amount→
4
4a
5. Pension and Death & Disability coverage calculation
Pension Compensation:
Total salary (line 1) x 1.25 if parsonage, or salary + housing allowance
Pension (CRSP) - Defined Benefit ***
Defined amount based on appointment increment (see *** below or the instructions)
Pension (CRSP) - Defined Contribution
Pension Compensation x 2%
(.25 appointment increment not eligible)
Disability (CPP): Fulltime Appointment
Pension Compensation x 3% If Pension Compensation exceeds 2 X DAC [134,666], use $4,039.98
Disability (CPP): Less Than Fulltime Appointment for (FE, PM, PE, AM, FD, PD)
Enter $2,289.32 for 3/4 time (participation mandatory);
Enter $2,962.65 for 1/2 time (participation optional)
Disability (UNUM): 3/4 time Local Pastors (LP) and Clergy from other denominations (OF)
Contact Benefits Officer at jean.edin@minnesotaumc.org for estimated premium
Pension & Disability TOTAL
6. Total Compensation for this Position: Total of 1, 2, 4, 4a, and 5.
(This figure is used for budgeting purposes by the local church. It is not the amount that goes on the W-2, nor is
it income for tax purposes.)
*
**
***
Please use 2016 MAC Plan Premiums included in the instructions.
If appointment is fulltime, enter $282.00 in line 1b; 3/4 time = $211.50; 1/2 time = $141.00; 1/4 time = $0.00
CRSP – Defined Benefit amounts: fulltime = $5,383.32, ¾ time = $4,037.52, ½ time = $2,691.72, ¼ time – not eligible
5
6
Church ________________________ City______________________________
Form 6
Reimbursable Items and Parsonage Utilities Budget
Forms 5, 6, and 7 are due in the district office within one week after your church conference, or no later than
December 1, 2015.
Clergy Name: _________________________________________________________________________
Pastoral Support as part of the ‘Total Budget for this Position’ also include reimbursable items (travel, continuing
education, and other professional expenses), these are not items of compensation if they are reimbursed under
an accountable reimbursement plan. All churches are encouraged to establish accountable reimbursement
plans. For assistance with budgeting and planning, we have listed reimbursable items and parsonage utilities
here. (Please note also that the Table II Financial Report to the Annual Conference does include reimbursable
items in the section “Pastoral Support—Local Church.”) For information on accountable reimbursement policy,
visit www.gcfa.org.
Reimbursable Items Budget
Item
6. Continuing Education
7. Travel
Parameters
Amount
$800 minimum, $1,568.80
recommended (2.5% of CAC)
IRS rate for 2015 is 57.5¢ per mile. Churches shall not
pay less than the current IRS rate. Churches will be
notified through the e-mail list if the IRS rate changes.
8. Other professional expenses
$500 minimum
9. Total budgeted for Reimbursable items
Sum of 7, 8, and 9
7
$
8
$
9
$
10
$
10. Total budgeted for parsonage utilities (Include here parsonage utilities paid by
church. This does not refer to the housing allowance.
11
$
11. Total amount to budget for Pastoral Compensation,
Accountable Reimbursable Items, and Parsonage Utilities
12
$
Sum of 6, 10, and 11
Church ________________________ City______________________________
Form 7
Multiple Church Compensation & Other Expense Breakdown
Clergy Name: ________________________________________________________________________________
Please enter the percentage and dollar amount each church pays.
Item
%
Church
%
Church
Church
TOTALS (from Pastoral
Compensation Form
% [Form 5] and Accountable
Reimbursement Form
[Form 6])
Total Salary
includes other nonMAC health insurance
contribution
(See Form 5 Line 1 and
Line 4a)
Housing or Utilities
(See Form 5 Line 2 or
Form 6 Line 11)
*Health Insurance
MAC Plan only
(See Form 5 Line 4)
*Pension & Disability
(See Form 5 Line 5)
Continuing Education
(See Form 6 Line 7)
Travel
(See Form 6 Line 8)
Other Professional
Expenses
(See Form 6 Line 9)
TOTAL PASTORAL
SUPPORT
*Billing for benefits in multi-church charges can be challenging. The simplest billing procedure is for one church
to be billed for all benefits with reimbursement from the other churches in the charge. When more than one
church is to be billed the pension portion can only be divided by whole percentages (i.e. 50%, 35%, not 22.5%).
If the Health Insurance premium is billed to more than one church it is preferred that only one church be
responsible for the salary reduction of the clergy’s share of premium for accurate reporting on the W-2 and
collection of premium. Special billing arrangements become a challenge and increase the possibility for error.
Note: Special billing arrangements must be communicated in writing to the Conference Benefits Officer with the
following specific information for billing: each church treasurer’s name, contact information and the payment
method (direct billed or ACH) for each church.
Church ________________________ City______________________________ Form 8a
2016 Parsonage Allowance Resolution
(Church-Owned Parsonage)
The approved document should be kept with the minutes of the meeting at the local church.
Copies should be given to the pastor and church treasurer for tax and payroll purposes.
Date ____________________________
TO: Church Council/Leadership Team
I hereby request that, of my 2016 compensation in the amount of $____________, the Council/Board designate
$___________ as a household furnishings/appurtenance allowance. I have reviewed my estimated expenses
related to 2016 and believe this to be a representative amount pursuant to Section 107 of the IRS code.
For the year 2016, I will receive the rent-free use of a home located at __________________________________
___________________________________________________________________________________________
Respectfully submitted,
Name _________________________________ Position _____________________________________________
Address ____________________________________________________________________________________
*********************************
The following resolution was duly adopted by the church council/administrative board of ______________
Church, after considering the statement of Pastor _____________________________ regarding the house
occupied, furnished, plus the cost of utilities, at a regularly scheduled meeting on ___________________, a
quorum as defined in the 2012 BOD (¶252.6) being present:
Whereas, section 107 of the Internal Revenue Code permits a minister of the gospel to exclude from gross
income “the rental value of a home furnished to him as part of his compensation,” and a churchdesignated parsonage allowance paid to him as part of his compensation to the extent used by him for
actual expenses incurred in maintaining a church-owned parsonage; and
Whereas, Pastor _________________________ is compensated by ________________________ Church
exclusively for services as a minister of the gospel; and
Whereas, ___________________________________ Church provides Pastor._____________________ with
rent-free use of a church-owned parsonage as compensation for services that he/she renders to the
church in the exercise of his/her ministry; and
Whereas, as additional compensation to Pastor ____________________________ for services that he/she
renders to the church in the exercise of his/her ministry, _______________________ Church also
desires to pay Pastor _________________ for expenses that he/she incurs in maintaining the
parsonage; therefore, it is hereby
Resolved, that the annual compensation paid to Pastor ____________________________ for the calendar year
2016 shall be $ _____________________, of which $__________ is hereby designated as a household
furnishings or rental or parsonage allowance pursuant to Section 107 of the Internal Revenue Code; and
it is further
Church ________________________ City______________________________ Form 8a
Resolved, that the designation of $__________ as a household furnishings or rental or parsonage allowance
shall apply to the calendar year 2016, and to all future years unless otherwise provided by this
Council/Board; and it is further
Resolved, that Pastor __________________________ shall also have the rent-free use of the Church-owned
house located at ___________________________________ for the year 2016 and that no rent or other
fee shall be payable by Pastor _________________________for such occupancy and use.
The parsonage or rental or housing allowance shall be so designated in the official church records.
Approved: Church Council/Leadership Team
___________________________________________________ _______________________________________
Secretary
Date
Church ________________________ City___________________________
Form 8b
2016 Housing Allowance Resolution
(Clergy Owns or Rents Home)
The approved document should be kept with the minutes of the meeting at the local church.
Copies should be given to the pastor and church treasurer for tax and payroll purposes.
DATE ___________________________
TO: Church Council/Leadership Team
I hereby request that, of my 2016 compensation in the amount of $__________, the Council/Board designate
$___________ as a household furnishings/appurtenance allowance. I also request that $__________ be
designated as a housing allowance. I have reviewed my estimated expenses related to 2016 and believe this to
be a representative amount pursuant to Section 107 of the IRS code.
Respectfully submitted,
Name _________________________________ Position _____________________________________________
Address ____________________________________________________________________________________
********************************
The following resolution was duly adopted by the church council/administrative board of ______________
Church at a (insert ‘regularly scheduled’ or ‘specially scheduled’) meeting on ___________________, a quorum
as defined in the 2012 BOD (¶252.6) being present:
Whereas, section 107 of the Internal Revenue Code permits a minister of the gospel to exclude from gross
income (in computing federal income taxes) “a church-designated allowance paid to him as part of his
compensation to the extent used by him for actual expenses in owning or renting a home;” and
Whereas, Pastor _________________________ is duly compensated by _________________Church exclusively
for services as a minister of the gospel; and
Whereas, __________________________ Church does not provide Pastor _____________________ with a
church-owned parsonage as compensation for services that he/she renders to the church in the exercise
of his/her ministry; therefore, it is hereby
Resolved, that Pastor ____________________________, who will receive compensation of $___________ for
the year 2016, shall have $ _____________________ of that compensation hereby designated as a
housing allowance and furnishings/appurtenance allowance pursuant to Section 107 of the Internal
Revenue Code; and it is further
Resolved, that the designation of $______________ as a housing/furnishing/appurtenance allowance shall apply
to the calendar year 2016, and to all future years unless otherwise provided by this Council/Board.
The parsonage or rental or housing allowance shall be so designated in the official conference records.
Approved: Church Council/Leadership Team
___________________________________________________ _______________________________________
Secretary
Date