If you received a W2, please follow the steps below:
On the W-2 entry screen, if you have an amount in your W-2 box 14 for your Clergy Housing Allowance, enter the amount with a description (clergy housing), then click Continue.
- On the Let's Review Your Box 14 screen, select Other-not on the above list and click Continue.
- On the Do Any of These Apply to This W-2? screen, check the I earned this income for religious employment button, then click Continue.
- NOTE: Do not check this box if your W-2 has Social Security tax withheld in box 4 and Medicare taxes withheld in box 6.
- On the About Your Religious Employment screen, if you are clergy check the option You earned this income for clergy employment and click Continue.
- On the Tell us about your Clergy Housing screen be sure to enter amounts in both boxes, then click Continue.
- The amount of your housing allowance that exceeds your Qualifying Expenses will be treated as income.
- On the next screen, Clergy Self-Employment Tax, select the option that applies to you, then click Continue to return to the W-2 Summary screen.
- If your W-2 box 1 income was not adjusted for your housing allowance, continue with the Enter Exception Information section below to enter a Form 1040 Line 21 Adjustment to Income.
Also, remember to enter any business expenses associated with your ministerial services later under Deductions & Credits, on the Your Deductions & Credits screen in the Employment Expenses category.
If you received a 1099-MISC, please follow the steps below:
Enter Form 1099-MISC clergy income (and housing allowance) as a self-employed business on Schedule C. If you report clergy income and your employer does not pay Social Security and Medicare tax, you must pay these taxes yourself in the form of self-employment tax or have an exception.
- In TurboTax Home & Business edition, select your clergy business or enter a business profile for your ministerial services. Continue to or click Enter next to the Business Code line.
- On the Business Code screen, verify your code (813000, religious organization is a common code), then click Continue.
- On the Clergy and Recognized Religious Sects screen, check the I Need to Pay Self-Employment Tax on This Income button, and click Continue.
- NOTE: If you've filed Form 4361 or 4029 and it was approved, check the appropriate line.
- On the Clergy/Members of Recognized Religious Sects screen, enter the amount of your housing allowance or parsonage allowance, then click Continue.
- Continue through the business interview to the Business Income category.
- Click Start/Update next to Business Income line.
- On the Business Income screen, click Start/Update next to the 1099-MISC topic.
- Follow the prompts to enter your Form 1099-MISC for clergy earnings.
Be sure to also enter any business expenses associated with your ministerial services.
