@tbhoye wrote:
I am a chaplain employed by the state of Maryland. Where do I enter the parsonage allowance on the SR-1040? Last year I entered it on line 8 of Schedule 1. This year it does not allow me to do that. When attempting to put it in the W-2 section of the 1040, it does not allow me to enter a number less than 0. Thank you in advance for your help in this matter.
A parsonage allowance is not subject to income tax, only self-employment tax. Why did you pay income tax on your parsonage allowance last year? You did it backwards, you paid income tax but not self-employment tax.
You may want to file an amended 2020 return. You may need a lot more education on your tax position as well.
These are good guide books.
https://www.ecfa.church/TaxBooks/Default.aspx
