How do i enter clergy housing allowance?

[AnnetteB · Accepted solution]

If your Clergy income is reported on a W-2, take a look at the first TurboTax article below for step-by-step instructions to enter your housing allowance.

If your Clergy income is reported on a Form 1099-MISC, then use the second TurboTax article below for your instructions to enter the housing allowance.

https://ttlc.intuit.com/replies/5412425

https://ttlc.intuit.com/replies/5412424

[PerryDianaGaines]

I have used Turbo Tax in the past. In the 2019 Turbo Tax, when I enter my housing allowance in box #14 the software adds the housing allowance to my base pay for federal taxes. The housing allowance is exempt from federal taxes. I have not had this issue in the past. I assume there is a software error. How do you get this information to Turbo Tax?

[DaveF1006]

while it is true that the clergy housing is exempt from federal income tax but it is not exempt from Self-Employment tax. You will still enter your clergy housing using the methods that were previously mentioned and then it should not be reported for federal tax purposes but you will still need to pay Self-Employment (FICA) taxes.  

[WilmaMarshall]

we do not get a w-2 from our church.  do we need to generate a w-2 or is their another way to claim this allowance not using w-2?

[WilmaMarshall]

sorry, I should have clarified...we receive housing allowance monthly from our church as approved by the church, however we do not receive a yearly w-2 form at the end of the year.  We serve a small congregation and receive a monthly check for housing allowance.

[aquablue]

I tried the second solution, using the minus sign. Then Turbo Tax could not electronically submit a form with a minus sign in it (so the Turbo Tax program informed me.) I could only print and submit my tax to the IRS through the mail. Is there a way to (1) make this easier (and easier to find while preparing my taxes) and (2) to find a way to file electronically even if there is a minus sign in the forms?

[KrisD15]

No, the second solution above does not use a negative, only when using the "Other Income" section which flows to Schedule 1 and then the 1040 line 8 do you use the negative sign. 

If you are entering a 1099-NEC, on the housing allowance screen enter the amount as a positive number. 

[PakBell]

I'm new to TurboTax and failed to successfully complete my 2020 taxes. I am a minister who receives a W2 in which box 14 shows my Housing Allowance. I import all my documents electronically, including W2, so this amount in imported. TurboTax later asks for the Housing allowance and for actual expenses. Total income is correctly calculated, excluding actual housing expenses. But line 2 on Schedule SE, showing gross income for SE purposes, is inflated: it contains double my housing allowance, i.e. it is over what it should be (already including the full allowance) by the full amount of the allowance. I've tried every suggestion online to resolve this, without success. I've tried entering the allowance as a negative value for line 21, and I tried deleting the W2 box 14 amount, but neither changed the SE income (SE line 2; I save the TT file to pdf so I can go in and look at the generated tax forms). I ran out of time and did my taxes the old way with printed forms. But I would like to resolve this in TurboTax so I'm not caught out next year. At wit's end.

[DaveF1006]

Keep in mind, your W2 income reported in Box 1 is also subject to SE Taxes as well as your housing allowance minus expenses. 

[CalvinD1]

I am a minister who doesn't receive a salary only a housing allowance. Every time I try and enter it into TurboTax, it drops my refund by $3000. It is clearly taking out Federal & SE taxes. How do I rectify? 

[DaveF1006]

The housing allowance is excluded from income taxes but not excluded from Social Security and Medicare. This income must be included on Schedule SE on Form 1040.

[CalvinD1]

On the online software, it doesn't give me the option only to allow Social Security and Medicare unless it's not that clear. But as soon as I add my housing allowance, my refund drops dramatically. My SS & Medicare tax should be roughly $1000, but my refund is dropping $3000. 

[PakBell]

Yes, I know this. I've been doing my taxes as a minister for 20+ years.

TT correctly calculates my income for income tax but not for SE tax.

1. 1040 line 9 Total income on 1040: correctly calculated as W2 wages + excess allowance (=housing allowance - actual expenses) + a few bits and bobs (INT, DIV, honoraria). My actual housing expenses are correctly excluded.

2. Schedule SE line 2: incorrectly calculated as W2 wages + excess allowance + actual expenses + housing allowance. The amount on this line exceeds what it should be by exactly the amount of my housing allowance (which has already been included in the amount). I.e. My full housing allowance is included exactly twice.

[culbrethcecil]

sorry that article doesn't even address the issue