Here are the list of steps to take to exclude your housing allowance reported on a 1099R.
If box 2b is checked
Enter the appropriate taxable amount in box 2a of the Enter your 1099-R details screen.
- Enter the amount in box 1 as it's shown on your 1099-R.
- Subtract your documented housing expenses from the gross. distribution amount in box 1 and enter the result or zero (whichever is greater) in Box 2a - Taxable amount.
- Check Taxable amount not determined box is checked in the box 2b section.
- Enter the rest of your 1099-R as you see it.
If box 2b is not checked
- Enter your 1099-R exactly as you see it and complete the 1099-R section.
- Search for other reportable income and then select the Jump to link in the search results.
- Answer No to Did you receive any other wages? and select Continue.
- Scroll all the way to the bottom of the Let's Work on Any Miscellaneous Income screen and select Start next to Other Reportable Income.
- Answer Yes to Any Other Taxable Income?
- On the Other Taxable Income screen, type Clergy Housing Allowance in the description and enter your documented housing expenses as a negative number up to the amount reported in Box 2a Taxable Amount (precede the expenses with a minus sign, like -10,000).
This will remove the nontaxable portion from the distribution reported on your 1099-R.
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