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State tax filing
In Turbotax, enter your W-2 as-is, then on the page for special circumstances, check the box for "religious wages". You will be asked if you have a housing allowance, and the program will generate a schedule SE to assess self-employment tax.
OR
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)
TurboTax CD/Download Instructions
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‎April 17, 2023
6:16 AM