An important part of clergy compensation is the establishment of a Housing Allowance. The Housing Allowance enables the clergy to exclude a certain portion of his or her compensation from federal taxation. It is important that each vestry/executive committee memorialize in its minutes the amount of the Housing Allowance as it applies to future compensation, inasmuch as the resolution cannot apply to compensation prior to the date of the resolution.
For this reason, it should be the standard practice of all vestries/executive committees to adopt a resolution in December of each year, indicating the amount of the Housing Allowance for the following year.
Attached are sample resolutions that you can tailor for your particular church.
