Per IRS, clergy 's housing allowance is not taxable and therefore not subject to income tax. However, the housing allowance is subject to self-employment tax. Because it is a tax-free housing allowance, you cannot deduct work-related expenses such as supplies or mileage, due to the Deason rule.
To enter your housing allowance in TurboTax Deluxe online version, go to:
- Sign in to your account and select Pick up where you left off
- Right upper corner, in the search box, type in “business code”, then Enter
- On-screen, “ Did you have any self-employment income or expenses?” select Yes
- Follow prompts
- On-screen, “Let’s get income for clergy”, select Additional income then Continue
- Continue to go through more step-by-step interview questions related to clergy
- On-screen, “Let’s look up your business code”, enter 813000
- Next screen, Clergy and Recognized Religious Sects, select I need to pay self-employment tax on this income, follow prompts to enter information
