The clergy housing allowance is not subject to federal income tax, but is subject to self-employment (FICA) tax. Follow these steps and TurboTax will make the income adjustment for you.
If your clergy income was reported on Form 1099-MISC, follow these steps.
- With your return open, search for business code and then click the "Jump to" link in the search results.
- Answer Yes when asked if you want to work on or set up your business (you may need to upgrade to Self Employed/Home & Business).
- If you land on the Business Summary screen, click Edit next to your clergy entry or Add Another Business if you haven't yet set it up.
- Continue with the questions, and when you get to the business code screen, enter 813000.
- Keep answering the questions, and eventually you'll get to the Clergy and Recognized Religious Sects screen.
- Make sure the first option is selected (that you need to pay self-employment) and then click Continue.
- On the next screen, you'll be able to enter your parsonage or housing allowance amount.
To get to the 1099-MISC entry screen, search for 1099-MISC or 1099MISC (lower-case also works) and then click the "Jump to" link in the search results.
