WESTERN DISTRICT CONFERENCE
March 24, 2015
A weekly communication for:
WDC Churches and Pastors
WDC Executive Board, Commission, Committee and Task Force members
Any content may be used in bulletins and newsletters
and forwarded to congregational leaders and members.
WDC Sprouts is also available at: www.mennowdc.org (Publications)
IN THIS ISSUE:
*Allocating a Housing Allowance
Allocating a Housing Allowance
by Phyllis Regier, WDC Business Manager
Most of our churches are aware that ministers do not pay federal income tax on the amount of their compensation that is designated in advance by their employing church as a “housing allowance”. Below is an article by Richard R. Hammar, ChurchFinanceToday.com concerning housing allowances for ministers.
Allocating a Housing Allowance
For ministers who own or rent their home a housing allowance is nontaxable only to the extent that it is used to pay housing expenses and does not exceed the fair rental value of the home (furnished, plus utilities).
However sometimes ministers incur more housing expenses than they anticipated during the year, which may mean that their housing allowance is not enough to cover all of their housing expenses. Often this is due to unforeseen housing expenses, or to the purchase of a new home. For whatever reason, if a minister’s housing expenses exceed the church-designated housing allowance, then the minister may not be receiving the full value of this important tax benefit.
How church treasurers can help. If your church designated a housing allowance for your minister (or ministers) for 2015, be sure to check the adequacy of the allowance throughout the year. If a minister’s housing expenses are more than expected, and will likely exceed the housing allowance, then the church can amend the allowance to make it larger. Unfortunately, many church boards do not know that a minister’s housing allowance can be amended during the year. Failing to amend a housing allowance to account for larger than expected housing expenses often will mean needless additional taxes for the minister.
Amending a minister’s housing allowance costs the church nothing. The church simply redesignates a larger portion of the minister’s salary as a housing allowance. But an amended housing allowance is only effective prospectively.
To amend your minister’s housing allowance you will need to pay attention to the following rules:
- Proper authorization.Be sure the amended housing allowance is authorized by the same group (usually the church board or congregation) that designated the original housing allowance.
- In writing.Be sure the amendment is duly recorded in the minutes of the group that approves it. The minutes should be dated, and recorded at or shortly after the meeting in which the amendment is approved.
- Prospective application.An amended housing allowance only operates “prospectively.” That is, it takes effect on the date it is approved, through the rest of the year. It cannot apply retroactively.
What if no housing allowance has been declared?
Some churches forget to designate a housing allowance for their minister in advance of the year. After all, few churches have a tax attorney or CPA on their board who is familiar with clergy taxes and so it is understandable that a church board may overlook this task. Is it too late after January 1 of 2015 to designate a housing allowance for a minister for 2015? The answer is no, but the allowance operates prospectively, meaning that it may only be used to pay for housing expenses incurred for the remainder of the year. This is simply another way of saying that a housing allowance is nontaxable only to the extent it is used to pay for housing expenses. This requirement cannot be met if a housing allowance is designated or applied retroactively since the expenses already have been paid.
“Safety net” housing allowances
Churches often neglect to designate a housing allowance for their minister. This frequently happens when a new minister is called or hired during the year, but it can also happen when a church inadvertently fails to designate a housing allowance for a minister before the start of a new year. To avoid these omissions, church boards should consider adopting a continuing resolution similar to the following: “40 percent of the salary of any minister on staff, regardless of when hired, is hereby designated as a housing allowance for the current year and each future year, unless otherwise specifically provided.”
The “40 percent” designation is used for illustrative purposes. Churches are free to use a different amount. However, the higher the amount, the more likely it will exceed the fair rental value of a minister’s home.
Tip. Such “safety net” designations should not be used as a substitute for annual housing allowance designations for each minister. They are simply a means of protecting ministers against inadvertent failures by the church to designate a timely housing allowance. Their efficacy has never been addressed by either the IRS or the courts.
- Ervin Stutzman, Executive Director of Mennonite Church USA, invites Western District Conference delegates to Kansas City 2015 to a meeting at First Mennonite Church, Newton, KS this Friday, March 27 at 7 pm. The purpose of the 90-minute meeting will include:
- briefly sharing the vision for the future of Mennonite Church USA, focusing on Jesus as the center of our faith, community as the center of our lives, and reconciliation as the center of our work
- providing a guide that outlines the delegates’ overall responsibilities at the assembly
- explaining how the results from the online delegate survey shaped the Executive Board’s decisions about the agenda
- distributing an agenda for the delegate sessions, and explaining the specific decisions which delegates will be invited to make
- providing handouts which delegates can use in congregational study groups
- engaging in a time of feedback and discussion
Interested pastors and members who are not serving as delegates, but would appreciate a first-hand briefing, are welcome as well. If you would like to connect via the internet for this meeting, notify Nancy Funk at email@example.com or 316-283-6300.
- WDC Reference Council is coming up on April 11 (9 am – 2 pm, lunch included) at Hope Mennonite Church in Wichita, KS. Hear the latest developments from Mennonite Church USA and continue our ongoing discernment regarding the Rainbow Mennonite Church resolution. Read the full resolution and letter of introduction at: https://mennowdc.org/annual-assembly/. Register online (at the same web address) by April 3, or call 316-283-6300.
- Nineteen scholarships for the Kansas Leadership Center have been awarded. The You.Lead.Now. seminar is offered monthly and several have already taken it. Even if you are planning to take it later in the year, now would be the time to apply for the Leadership Transformation Grant from Western District Conference. Go to https://mennowdc.org/grants/ for the application or call Clarence Rempel, 316-283-6300, for more information.
- The 2015 WDC Annual Assembly will be held at Bethel College in North Newton on October 30-31. Resolutions must be submitted by June 30 to the WDC Executive Board, PO Box 306, North Newton, KS 67117. See the resolutions policy at: https://mennowdc.org/annual-assembly/
- Men and Boys Retreat at Camp Mennoscah is April 10-12. Pastor Phil Schmidt will be our speaker for the weekend. You can come on Friday already, although Saturday supper will be the first meal provided. Lodging for the weekend is available on a first-come, first-served basis and includes cabins, staff houses, or bring a tent. RV, or sleep under the stars. If you have any questions, contact Kevin Neufeld at 316-284-0450 or firstname.lastname@example.org.
- The WDC Basketball Tournament was held last week, in which nine teams participated: Division I – Eden Mennonite Church, Moundridge, KS (1st place); Whitestone Mennonite Church, Hesston, KS; Grace Hill & Zion Mennonite churches, Whitewater & Elbing, KS; Journey Mennonite Church, South Hutchinson, KS; Alexanderwohl Mennonite Church, Goessel, KS; Division II – Tabor Mennonite Church, Newton, KS (1st place); Hoffnungsau Mennonite Church, Inman, KS: Zion & Grace Hill Mennonite churches, Elbing & Whitewater, KS; Bethel College Mennonite Church, North Newton, KS.
- Going to the Mennonite Church USA Convention in Kansas City June 30-July 5 2015 in Kansas City? Are you looking for a roommate or want to carpool? Let WDC know, and we’ll try to help you make those connections. Email or call Nancy at email@example.com or 316-283-6300.
Menonite Church Announcements
- The Convention Prayer Team and AMBS-Kansas Center will host a Prayer Retreat prior to the MC USA Convention in July. This retreat is intended for pastors, congregational leaders, delegates, members and anyone who is interested in coming together to join in prayer in preparation for Convention. This retreat will be held on Sunday, May 3, at the Dyck Arboretum of the Plains in Hesston, KS. The retreat begins at 4:30 pm and will conclude with a faspa supper at 6:00, so participants are invited to bring faspa finger foods (bread, meat, cheese, pickles, fruit, etc.) to share. This event is free and open to the public. For more information, please see https://www.ambs.edu/news-events/Prayer-Gathering.cfm. To RSVP as a congregation or as an individual, please contact Katherine Goerzen at firstname.lastname@example.org by April 27.
- Adult Bible School: Sermon on the Mount: June is the month for Bible School, and so any adult looking for an opportunity for spiritual growth, renewed discipleship, and a chance to dive deeper into the Bible is invited to participate in an Adult Bible School on the Sermon on the Mount. This continuing education opportunity is hosted by AMBS-Kansas Center and will be taught by Jerry Truex. It will meet June 1, 8, 15, and 22 from 7:00-9:30 pm at the Hesston Mennonite Church in Hesston, KS. The cost per person is $50. Registration will be available soon (Please plan to register by May 11). For more information, please contact Katherine Goerzen at email@example.com.
- Mennonite World Conference is coming to North America (21-26 July 2015, Harrisburg, PA, USA), and Mennonites of all ages are welcome! Children will meet in their own space to celebrate Assembly each day and share across languages and backgrounds. Youth will meet every morning in the Global Church Village and have special workshops, service opportunities, sports and tours each afternoon. More info at mwc-cmm.org/pa2015.
- Why should Anabaptist healthcare workers be concerned about community health, the Lord’s Supper, and persons with disabilities? Come and hear chaplain David Gullman contribute to the overall theme of “Walking Together for Healthy Communities” at the Mennonite Healthcare Fellowship (MHF) Annual Gathering 2015, July 19-21, in Harrisburg, PA. All healthcare workers, past, present, and future, along with their families, are warmly invited. Grants are available for students, volunteers, and those outside the U.S. and Canada. Annual Gathering is a family-friendly event with a children and youth program for ages 0-18. For more information and registration, go to www.mennohealth/gathering, email info @mennohealth.org, or call toll-free to 1-888-406-3643.
Western District Conference
2517 North Main, PO Box 306
North Newton KS 67117
316-283-6300; FAX: 316-283-0620