1099R

My husband is a clergy with income from W2 of $24050 (Jan-Jun 2024), out of which $20550 was designated as housing allowance by the church, 1099NEC of $24050 for clergy work (Jul-Dec2024) and Clergy Pension of $18677. We incurred housing expenses of $55156 in 2024. Only $20550 of the expenses were used as housing allowance as shown on the W2.
- Can the unused portion of the housing expenses be used against the 1099NEC income or against the Clergy Pension income?

- If the housing expenses can be used against the Pension distribution, where on the 1099R do I report the housing expenses to offset the Pension distribution. The 1099R has zero on Box 2a and Box 2b is Checked.

238

Employee Tax Expert

Sep 17, 2025 4:59:05 PM

No, you cannot use the unused portion of your housing expenses from your W2 income to offset your 1099-NEC income. However, if your clergy pension plan permits it, you may be able to use your remaining housing expenses to reduce the taxable portion of your pension distribution.

A retired clergy member can often reduce their taxable pension distribution by using a housing allowance if their pension plan permits it and the housing expenses are properly designated and documented. To qualify, the amount excluded is limited to the least of the designated allowance, the actual housing expenses incurred (including rent, mortgage, utilities, and repairs), or the fair rental value of the home.

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1099R