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New Member

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 2

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.

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Level 2

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.

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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?

@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?  

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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?

This answer looks like what I have done on other systems, but the path specified for a 2018 return does not work for a 2019 return.  Can't find the titles specified, they are a little different and can't find the two forms mentioned (1099-A, 1099-C).

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New Member

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

I couldn't get the first solution to work, but going in to add it as a misc other income as if 2b wasn't checked finally did the trick, and the 1040 looks correct now when I look at it in forms.  Wish Turbo Tax would just ask the question somewhere if a person is retired clergy, like they ask for other income.

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New Member

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

This method does exclude retirement income used as minister's housing from 1040; however, how do you add it back in for Schedule SE?  It does not show up when I use this method.

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Expert Alumni

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

Generally retirement pension income from a retired Clergy member is not subject to Self-Employment tax. If however you still perform weddings, baptisms, or other events for paid compensation, then these services become earned income and are subject to income taxes as well as SE taxes. 

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Returning Member

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

I receive a Housing Allowance as a Ret

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Expert Alumni

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

The housing allowance would not be subject to self-employment tax if it was pension income.

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Returning Member

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

We have used this method for many years and it worked fine. This year we are getting a review error to enter information for the simplified method of calculating the taxable amount. We have selected "general method", but still has review error for the simplified method and won't let us file without correcting. What do we need to do to fix this?

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Expert Alumni

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

Please review this IRS link that explains the difference between using the simplified method vs general. If you select that your annuity payment is from a Qualified Plan, you must use the simplified method per IRS rules. Recheck your entries to determine if you may have indicated that this annuity distribution is from a qualified plan. 

  1. Go to federal>wages and income>retirement income>Ira>401k>pension plan withdrawals(1099R) update
  2. Edit the 1099R and scroll through the questions until you reach a screen that asks Where did this distribution come from? Indicate it came from a non-qualified plan. If this doesn't work, you may wish to contact a specialist that can work through that section of the return with you. The specialists can look at your return on their screen to find out exactly what is causing this issue and suggest how you can take corrective action if needed.

 

 

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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 have followed these instructions.

Box 2b is checked.

My allowable expenses result in a zero balance.

Does this method then also exclude this income from SE tax computation?

 

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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?

It is my understanding that retirement income for a minister does not make its way to SE.  This would be true even if you don't spend your entire housing allowance for housing expenses.  If you don't spend it all, the remainder is taxable for income tax purposes but not for schedule SE.  It is not earned income.  Someone above mentioned that if you are still doing things like funerals and weddings, these items would be taxable for both income tax and schedule SE.

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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?

Thank you!

This is helpful confirmation.