To enter your parsonage or housing allowance on your W-2, follow the steps below. These instructions will work if your housing allowance is included in box 1 of your W-2. If it's not in box 1, it may result in an over adjustment of income.
- Open or continue your return in TurboTax.
- Select Search and enter W-2.
- Select Jump to W-2.
- When you get to Box 14, enter Clergy Housing in the Description box, followed by the amount. (The amount might be reported to you in a letter from the church or in your employment contract if not on your W-2.) If the allowance isn't automatically classified as Other (not classified), select this option from the dropdown menu. Select Continue.
- If you get additional screens, answer those questions.
- When you reach the Let's check for uncommon situations screen, check the box for Religious employment, then select Continue.
- On the following screen, choose Clergy and select Continue.
- Enter your allowance on the Okay, Tell Us About your Clergy Housing screen. For Qualifying Expenses, enter the lesser of:
- Your qualified housing expenses
- The fair rental value of your housing expenses
- Your housing or parsonage allowance
- Select Continue, and on the Clergy Self-Employment Tax screen, choose the appropriate option and Continue again.
When you see the Your W-2 info so far screen, select Edit to view your W-2 information. If the Box 1 amount hasn't been adjusted for your housing allowance, enter a Line 21 adjustment to income. Here's how:
- Search for other reportable income and select the Jump to link in the search results.
- Answer No to Did you receive any other wages? and select Continue.
- Scroll to the bottom of the Miscellaneous Income screen and choose Start next to Other reportable income.
- Answer Yes, and on the Other Taxable Income screen, type Clergy Housing Allowance in the description and enter it as a negative number (precede it with a minus sign, for example -10,000).
