Retirement Benefits and Housing Allowance for Ministers of the Gospel
Effective July 1, 2020, WELS announced a change in its interpretation of the workers who may be considered “ministers of the gospel” for federal tax purposes, which was based on a thorough investigation and legal opinion from a nationally recognized expert in this area of tax law. Read the WELS announcement here.
Distributions from the WELS Pension Plan and the WELS Shepherd Plan to a participant who served as a minister of the gospel, for benefits earned under the Pension Plan or eligible contributions made to the Shepherd Plan based on that participant’s service as a minister of the gospel, may be excludable from taxable income as a housing allowance to the extent permitted by Internal Revenue Code section 107.
The announced change and corresponding minister of the gospel tax status apply to workers who perform service on or after July 1, 2020. Therefore, benefits earned under the Pension Plan and eligible contributions made to the Shepherd Plan for service performed on or after July 1, 2020 by workers who may be considered ministers of the gospel (as determined by WELS) may be eligible for distribution as a housing allowance. However, benefits earned under the Pension Plan and contributions made to the Shepherd Plan for service performed before July 1, 2020 by workers who were not considered ministers of the gospel (as determined by WELS) when that service was performed will not be eligible for distribution as a housing allowance.
Please feel free to contact the WELS Benefit Plans Office by email to [email protected] or by calling 414-256-3299 if you have any questions.