Clergy Housing Allowance

[jaysay1020]

I have a W-2 for my employment as a minister and all of my income on my W-2 was designated as housing allowance for my home.  I entered it in Box 14 as Clergy Housing Allowance, but it's not deducting the amount allowance from my taxable income.  TurboTax has articles that say that I'm supposed to enter the housing allowance as a negative number in "Other Reportable Income" but when I do that and attempt to file the IRS rejects the tax return because it thinks I made an error.  Can someone please tell me the correct way to deduct my clergy housing allowance from my taxable income?  Thank you!

[PatriciaV]

TurboTax doesn't use the entry from W-2 Box 14 because this is a memo field for your information when completing your return. After you entered the W-2 did you check the box for "Clergy" on the page "Let's check for uncommon situations"? 

1. If so, you should have been prompted to enter your Qualifying Expenses on the next page. This is where you enter the amount from W-2 Box 14. 
2. Answer any additional questions and continue back to the W-2 summary page. 
3. Edit your W-2 to check if the Box 1 amount has been adjusted for your housing allowance.
4. If not, go to Other Reportable Income to enter a negative amount for Form 1040 Line 21, but only if Box 1 is not adjusted by your housing allowance entry.

You may wish to review the complete list of steps here: How do I enter a parsonage or housing allowance reported on a W-2?

Also, please note the discussion by Opus17 regarding how your wages/housing allowance should be reported to you in the future.

[edited 1/27/2026 | 1:01pm PDT]

[Opus 17]

That's not how it works.  If you have a clergy housing allowance, that amount is not reported on your W-2 anywhere (it could be reported in box 14 but that is just a memo field).

If your entire wages are designated as a housing allowance you should not get a W-2 at all, there is no way to issue one.  (You can still file with Turbotax but must use a work-around.)  If part of your wages are salary and part are designated as a housing allowance, you should get a W-2 with only the wages portion in box 1.  Box 2 may or may not have federal tax withholding, and boxes 3-6 should be blank.

What is in boxes 1-6 of your W-2?  If there is any figure in those boxes, then the church is not paying you correctly.  You would need a corrected W-2 and the church would need to file amended form 941 or form 944 to correct the reporting of your wages and withholding.