How do I enter a clergy housing allowance when no 1099 or W-2 is issued?

ilovemysobes · ‎May 31, 2019

I am a part time pastor who earns a small housing allowance designated as such by the church that does not even cover my housing expenses. Since there is no other salary, the church is not required to issue a W-2 or a 1099.

How is this entered into TurboTax online so that it is subject to the self-employment taxes but not subject to income tax? Previously my CPA reported it on schedule SE, and then has a statement section which is adapted from IRS publication 517 that shows it was all used for housing.

Any help entering this without a 1099 or W-2 would be appreciated. Accountants we have spoken with have confirmed we do not need a W-2 or 1099. I was hoping to save money this year and file using TurboTax, but I am thinking we may have to go back to an accountant.

Opus 17 · ‎May 31, 2019

You will need to use the self-employed version if filing with turbotax online. Create your "small business" using occupation code 813000 -- this is a code for religious workers and will trigger questions about your housing allowance, qualified expenses, and self-employment tax. You may not have any 1099-MISC for income, but you may have other cash income such as from weddings and funerals that you would add here.

Note that because all your compensation is a tax-free housing allowance, you can't deduct work-related expenses such as supplies or mileage, due to the Deason rule.

If filing with Turbotax installed on your own computer, you can use the Deluxe version instead of Home & Business, but you still need to create a schedule C business with code 813000.

bigteks2 · ‎May 15, 2021

Hi I have a similar problem. I do have a schedule C for my clergy housing income using code 81300, but I do not seem to be able to trigger the housing question. I have entered my housing a an override in the SE worksheet but this disables efiling in home and business 2020. I would much rather efile if possible.

Do you know what steps I need to take in order to trigger the housing questions in TT (Windows) 2020? I also do not have this income reported on a W2 or 1099R so ...

Opus 17 · ‎May 16, 2021

@bigteks2 wrote:

Hi I have a similar problem. I do have a schedule C for my clergy housing income using code 81300, but I do not seem to be able to trigger the housing question. I have entered my housing a an override in the SE worksheet but this disables efiling in home and business 2020. I would much rather efile if possible.

Do you know what steps I need to take in order to trigger the housing questions in TT (Windows) 2020? I also do not have this income reported on a W2 or 1099R so ...

I don't know how you got to the place you are. You may need to start over from scratch, or at least delete your schedule C and everything attached, and start over with that part.

When you create the job with code 813000, you should be asked right away about a housing allowance. If you don't also have taxable income, you can't deduct work-related expenses due to the Deason rule, so you won't have a schedule C, just a schedule SE.

Also, I don't think a simple manual entry blocks e-filing, just an override. Once you create the job, you can enter the housing allowance directly on the schedule C worksheet instead of doing an override on schedule SE or the Schedule SE Adjustment Worksheet.