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fab5waits
New Member

I work as a minister and have a form 4361 on file so I am exempt from social security tax on my church earnings, but cannot find where to show that on the online fields?

 
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3 Replies
KarenJ
Intuit Alumni

I work as a minister and have a form 4361 on file so I am exempt from social security tax on my church earnings, but cannot find where to show that on the online fields?

If you were paid on a W-2, then after entering the W-2, check the box for "religious wages" on the page of special circumstances. You will then be asked about her housing allowance and housing expenses, and you will be asked how to pay self-employment tax. One of the choices is that you have an approved form 4361 exemption.

 If you are paid on a 1099 – MISC form, then you need to use business code 813000 when you set up your schedule C.  This is a code that includes charitable organizations and will trigger a question about your housing allowance, housing expenses, and payment of self-employment tax. You can again select that you have the 4361 exemption. 


Tkachevv
New Member

I work as a minister and have a form 4361 on file so I am exempt from social security tax on my church earnings, but cannot find where to show that on the online fields?

I cannot find "special circumstances"or "religious wages" on my Turbotax after entering the W-2.

Cynthiad66
Expert Alumni

I work as a minister and have a form 4361 on file so I am exempt from social security tax on my church earnings, but cannot find where to show that on the online fields?

In Turbotax, enter your W-2 as-is, then on the page for special circumstances, check the box for "religious wages".  You will be asked if you have a housing allowance, and the program will generate a schedule SE to assess self-employment tax.

 

OR

 

To enter your parsonage or housing allowance on your W-2, follow the steps below. These instructions will work if your housing allowance is included in box 1 of your W-2. If it's not in box 1, it may result in an over adjustment of income.

  1. Open or continue your return in TurboTax
  2. Select Search and enter W-2
  3. Select Jump to W-2
  4. When you get to Box 14, enter Clergy Housing in the Description box, followed by the amount. (The amount might be reported to you in a letter from the church or in your employment contract if not on your W-2.) If the allowance isn't automatically classified as Other (not classified), select this option from the dropdown menu. Select Continue
  5. If you get additional screens, answer those questions
  6. When you reach the Let's check for uncommon situations screen, check the box for Religious employment, then select Continue
  7. On the following screen, choose Clergy and select Continue
  8. Enter your allowance on the Okay, Tell Us About your Clergy Housing screen. For Qualifying Expenses, enter the lesser of:
    • Your qualified housing expenses
    • The fair rental value of your housing expenses
    • Your housing or parsonage allowance
  9. Select Continue, and on the Clergy Self-Employment Tax screen, choose the appropriate option and Continue again

When you see the Your W-2 info so far screen, select Edit to view your W-2 information. If the Box 1 amount hasn't been adjusted for your housing allowance, enter a Line 21 adjustment to income. Here's how:

  1. Search for other reportable income and select the Jump to link in the search results
  2. Answer No to Did you receive any other wages? and select Continue
  3. Scroll to the bottom of the Miscellaneous Income screen and choose Start next to Other reportable income
  4. Answer Yes, and on the Other Taxable Income screen, type Clergy Housing Allowance in the description and enter it as a negative number (precede it with a minus sign, for example -10,000)

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@Tkachevv 

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