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Level 1

How do I enter minister's housing allowance, as a retired minister, when I do not receive a w-2 form?

I am a retired minister and do not receive a w-2 form. I do receive a 1099-R  but do not know how to enter housing allowance expenditures which has effect on my total 1099-R distribution.

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Level 6

How do I enter minister's housing allowance, as a retired minister, when I do not receive a w-2 form?

You need to designate a portion of your retirement for housing allowance, just as you did when you were an active minister.  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.

  1. 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.
  2. 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 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 Line 21 for your housing allowance will remove it from taxation.
2 Replies
Level 6

How do I enter minister's housing allowance, as a retired minister, when I do not receive a w-2 form?

You need to designate a portion of your retirement for housing allowance, just as you did when you were an active minister.  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.

  1. 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.
  2. 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 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 Line 21 for your housing allowance will remove it from taxation.
Level 6

How do I enter minister's housing allowance, as a retired minister, when I do not receive a w-2 form?

@KittyM Regarding "Revenue Ruling 75-22" and Minister's Housing Allowance in retirement:  I am currently invested in a 403B9 with my denomination's church retirement plan with Guidestone.  If I convert the 403B9 to another retirement plan, such as a 403B7 Church Plan with a commercial vendor, does the housing allowance tax free retirement income benefit still apply?  Or does it only apply to the originating plan that designated the housing allowance?