I am retired clergy and my pension and another account are applied to housing allowance. The Turbotax program makes it taxable when it is not. How can I fix this?

[JamesG1]

How you account for the exclusion depends on whether box 2b (taxable amount not determined) is checked.

If box 2b is checked

1. Enter the appropriate taxable amount in box 2a of the Enter your 1099-R details screen.
2. Enter the amount in box 1 as it's shown on your 1099-R.
3. 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.
4. Check Taxable amount not determined box is checked in the box 2b section.
5. Enter the rest of your 1099-R as you see it.

If box 2b is not checked

1. Enter your 1099-R exactly as you see it and complete the 1099-R section.
2. Search for other reportable income and then select the Jump to link in the search results.
3. Answer No to Did you receive any other wages? and select Continue.
4. 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.
5. Answer Yes to Any Other Taxable Income?
6. 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).
7. This will remove the nontaxable portion from the distribution reported on your 1099-R.

In TurboTax Online, report the IRS form 1099-R by following these steps: 

• Down the left side of the screen, click on Federal.
• Down the left side of the screen, click on Wages & income.
• Scroll down to Retirement Plans Social Security.  Click the down arrow to the right.
• Click Start / Revisit to the right of IRA 401K Pension Plan Withdrawals.
• At the screen Did you get a 1099-R in 2025?, select Yes.

See this TurboTax Help.

[Clauduccia]

My husband is a retired minister and has three 1099-R forms to include--two of them have the 2b box checked, one does not.

I did manage to find on my Deluxe desktop version where you go to "Less Common Income", and then to "Miscellaneous Income" to report the housing costs with a negative number.  His costs greatly exceed all three amounts of income on his 1099-R when totaled together.

I've always used TaxAct and did not have all of this--this is my first time with TurboTax.  What was always fairly easy, now seems quite complicated.  None of the information requirements on screens I have copied below from TurboTax were ever required in TaxAct.   I'm hoping I'm not doing things quite right, and it is triggering more screens asking for info.

Can you walk me through the rest of these screens, please?  Thanks so much.

I'm working on the 1099-R which DOES have the box checked.  It eventually gets me to a screen that asks this--am I correct that I should check "No"?:

Annuity information

For the years you received these distributions, was the total amount shown in the form the amount you paid tax on?

Total amount taxable

Yes

No

Then, after checking "No":  I get to this (and I really don't know which to check, but I think Simplified Method):

Annuity information

Which did you use to figure out the taxable amount of this annuity?

Taxable amount method

General rule

Simplified method

And, if this is correct, I come to this:

Annuity information

Annuity start date

Plan cost

Number of months payments were received in 2025

Tax-free amount previously recovered

Death benefit exclusion

[RogerD1]

If you had been using TaxAct and these questions look to be unfamiliar to you, then it very likely that you were using the Taxable amount shown on the 1099-R as the amount you were being taxed on.  If you select Yes for using the total amount taxable on previous returns, then you won't enter any of the other information you listed here.

However, if any of the amounts contributed to the pension were made "after-tax" - either contributions the church made to the pension that you paid taxes on, or your personal contributions that had taxed paid on them - then any of these amounts included in the pension can be withdrawn without being taxed.  Simplified method would be the correct selection.  But this is going to require some research and digging on your part to get this information - the two hardest items to determine will be if any pension received in prior years was non-taxable and also the Plan cost which would be the already taxed contributions made to the plan.  Knowing this information can reduce your tax burden, but it's up to you if you want to spend the time researching everything needed to make this determination.  

[Opus 17]

Be aware that only retirement income provided by the denomination can be considered a non-taxable housing allowance.  If you have a pension or 403b from the church and an IRA, only the pension from the church is eligible to be treated as a housing allowance.  And if you roll over that pension or 403b to an IRA, you lose that benefit forever.  

[Clauduccia]

Thank you this is helpful.  I'm getting close.  One of them is responding correctly after I changed the No to Yes regarding the total amount taxable.  I think I'll try deleting them and re-entering.  

[Clauduccia]

Yes, good reminder, thank you.  All three of these are from church pension accounts, never rolled or converted.