Where do I show that my retirement is non taxable as stated by the Western North Carolina Conference of the United Methodist Church on this year's turbo tax?

Forum|Forum|7 years ago
June 4, 2019
1 reply
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THEREFORE, BE IT RESOLVED: THAT an amount equal to 100 percent of the pension or disability payments received from plans authorized under The Book of Discipline of The United Methodist Church (the “Discipline”), which includes all such payments from the General Board of Pension and Health Benefits (“GBOPHB”), the Western North Carolina Conference Superannuate Endowment Fund, and The Duke Endowment during the period January 1, 2018 through December 31, 2018 by each active, retired, terminated, or disabled Clergyperson who is or was a member of the Conference, or its predecessors, be and hereby is designated as a rental/housing allowance for each such Clergyperson;

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Best answer by KittyM

Revenue Ruling 75-22 allows denominational pension boards to designate a housing allowance for retired ministers receiving income. Retired ministers may ask their board to designate up to 100% of their retirement income as housing, but retired ministers must continue to follow the housing allowance rules and limits as when they were active.

Once you reduce the pension amount by the housing allowance, only the difference will be taxable. If your 1099-R reports only the pension and excludes the housing allowance, all you need to do is enter your 1099-R and you're finished.

However, if the pension does include the housing allowance, the entry for your housing allowance depends on if box 2b (taxable amount not determined) on your 1099-R is checked or not. The taxable difference of the pension and excluded housing allowance will have to be manually entered in the 1099-R interview questions.

If your Form 1099-R has Box 2b checked, then to claim a housing allowance for retired clergy, enter a taxable amount in Box 2a of the 1099-R data entry screen in TurboTax. To compute the taxable amount, subtract the allowable housing expenses from the pension amount. If the housing expenses exceed the pension, enter a zero in Box 2a.
If Box 2b is not checked, please enter the 1099-R exactly as it appears on the form. This will cause the full amount to show as taxable. You will make your adjustment in Other Income, following the instructions below:

Open your Federal return and choose Wages & Income
Scroll down to Less Common Income and Show more
Choose Miscellaneous Income, 1099-A, 1099-C
Choose Other reportable income, and Start or Revisit
Select ‘yes’ and you will be prompted to enter a description and amount. Enter the description "Retired Minister Housing Allowance," and enter the amount as a negative number. At this point, the form 1040 will show your full pension as taxable, but the negative adjustment on Schedule 1, Line 21 for your housing allowance will remove it from taxation.

K

KittyMAnswer

Level 10

Revenue Ruling 75-22 allows denominational pension boards to designate a housing allowance for retired ministers receiving income. Retired ministers may ask their board to designate up to 100% of their retirement income as housing, but retired ministers must continue to follow the housing allowance rules and limits as when they were active.

Once you reduce the pension amount by the housing allowance, only the difference will be taxable. If your 1099-R reports only the pension and excludes the housing allowance, all you need to do is enter your 1099-R and you're finished.

However, if the pension does include the housing allowance, the entry for your housing allowance depends on if box 2b (taxable amount not determined) on your 1099-R is checked or not. The taxable difference of the pension and excluded housing allowance will have to be manually entered in the 1099-R interview questions.

If your Form 1099-R has Box 2b checked, then to claim a housing allowance for retired clergy, enter a taxable amount in Box 2a of the 1099-R data entry screen in TurboTax. To compute the taxable amount, subtract the allowable housing expenses from the pension amount. If the housing expenses exceed the pension, enter a zero in Box 2a.
If Box 2b is not checked, please enter the 1099-R exactly as it appears on the form. This will cause the full amount to show as taxable. You will make your adjustment in Other Income, following the instructions below:

Open your Federal return and choose Wages & Income
Scroll down to Less Common Income and Show more
Choose Miscellaneous Income, 1099-A, 1099-C
Choose Other reportable income, and Start or Revisit
Select ‘yes’ and you will be prompted to enter a description and amount. Enter the description "Retired Minister Housing Allowance," and enter the amount as a negative number. At this point, the form 1040 will show your full pension as taxable, but the negative adjustment on Schedule 1, Line 21 for your housing allowance will remove it from taxation.