I don't believe you can designate your own retirement funds as a housing allowance. The designation must be made in advance and in writing by your church, your denomination, or someone else who has appropriate authority now that you are retired.
@ScruffyCurmudgeon Can you comment?
I rely on these guides, you may need to pay to download or your denomination may have a membership.
https://www.ecfa.org/TaxGuides/Default.aspx
What I am reading now seems to indicate that the denomination can make a blanket determination that the retirement account constitutes a housing allowance, I suggest you confirm that in writing. Any excess withdrawal more than your qualified housing expenses must be added back to your taxable wages. You are supposed to attach a written statement showing your calculations, but you can't attach statements if using Turbotax to e-file.
Also, only a 403b sponsored by your denomination is eligible to be treated as a housing allowance. Any other retirement funds are not eligible. If you rolled the funds over to an IRA, they would no longer be eligible.
Pension payments, retirement allowances, or disability payments paid to a retired minister from an established plan are generally taxable as pension income. However, most denominations designate a housing allowance for retired ministers to compensate them for past services to local churches of the denomination, to the denomination itself, or in denominational administrative positions. The housing allowance designated relates only to payments from the denominationally-sponsored retirement program.
