Where do I enter clergy housing expenses?

[davglaze]

Need to account for exempted ministerial housing allowance

[SharonD007]

To enter clergy housing allowance, refer to the TurboTax Help article How do I enter a parsonage or housing allowance reported on a W-2?

[davglaze]

Thank you. I had seen that, but I'm retired with no W-2. Not finding in software where to account for Housing Allowance amount listed on 1099-R. 

[Opus 17 · Accepted solution]

---

@davglaze wrote:

Thank you. I had seen that, but I'm retired with no W-2. Not finding in software where to account for Housing Allowance amount listed on 1099-R. 

---

See if this article helps.

https://ttlc.intuit.com/turbotax-support/en-us/help-article/retirement-benefits/enter-parsonage-hous...

[LordHelpMe]

IF CLERGY HOUSING ALLOWANCE IS IN W-2 BOX 14 -

1. IF YOUR ACCOUNTANT PUTS YOUR HOUSING ALLOWANCE IN box 14 on your W2, put it in box 14 on TurboTax, continue.
2. LET'S CHECK FOR UNCOMMON SITUATIONS: Check Religious Employment, continue
3. LET'S DIG INTO YOUR RELIGIOUS EMPLOYMENT: Check Clergy, continue
4. OK, TELL US ABOUT OUR CLERGY HOUSING: Parsonage or housing allowance = 0 (put nothing or zero). Do fill in your qualifying expenses, continue.
5. NOW TELL US ABOUT YOUR CLEARGY SELF-EMPLOYMENT TAXES: Pay self-employment tax on my housing allowance.
6. You'll know you did this right if your housing allowances shows up right on your SE.

IF CLERGY HOUSING ALLOWANCE IS **NOT** IN W-2 BOX 14 -

1. IF YOUR ACCOUNTANT OMITS YOUR HOUSING ALLOWANCE FROM box 14 on your W2 but GIVES YOU A LETTER INSTEAD, leave that box blank, Continue
2. LET'S CHECK FOR UNCOMMON SITUATIONS: Check Religious Employment, continue
3. LET'S DIG INTO YOUR RELIGIOUS EMPLOYMENT: Check Clergy, continue
4. OK, TELL US ABOUT OUR CLERGY HOUSING: Parsonage or housing allowance = put in your housing allowance here. Do fill in your qualifying expenses, continue.
5. NOW TELL US ABOUT YOUR CLEARGY SELF-EMPLOYMENT TAXES: Pay self-employment tax on my housing allowance.
6. You'll know you did this right if your housing allowances shows up right on your SE.

DO NOT DO THIS:
1. Search for other reportable income and select the Jump to link.
2. Answer No to Did you receive any other wages? and select Continue.
3. Scroll to the bottom of the Let's Work on Any Miscellaneous Income screen and select Start next to Other reportable income.
4. Answer Yes, and on the Any Other Taxable Income screen, type Clergy Housing Allowance in the description and enter it as a negative number (precede it with a minus sign) -- YOUR RETURN WILL LOOK VERY WRONG WITH NEGATIVE NUMBERS ON Schedule 1 box Z, and the SE box 2. It will also mess up your STATE.

[Opus 17]

1. OK, TELL US ABOUT OUR CLERGY HOUSING: Parsonage or housing allowance = 0 (put nothing or zero). Do fill in your qualifying expenses, continue.

This is absolutely incorrect.  Box 14 is a memo field, it is not used by the IRS for official purposes, and Turbotax will not tax your housing allowance properly (it is subject to SE tax even though it is excluded from income tax) unless you enter the housing allowance in the followup interview.  Box 14 is not enough. 

[jeanninecary]

@Opus 17 

My husband is a Prison Chaplain employed by the State. They gave him a letter to elect whether to have them deduct the allowance, BUT he did not complete it and turn it in to them; S.S. and Medicare were taken out of his gross pay and there's no allowance shown on his W-2. Everything I've read suggests that in order to take this allowance the amount has to have been determined prior to being paid. However, he is being told that we can still claim this allowance. Do you know if this is true, and if so how? Do I put the amount in Other Deductions?

[Opus 17]

---

@jeanninecary wrote:

@Opus 17 

My husband is a Prison Chaplain employed by the State. They gave him a letter to elect whether to have them deduct the allowance, BUT he did not complete it and turn it in to them; S.S. and Medicare were taken out of his gross pay and there's no allowance shown on his W-2. Everything I've read suggests that in order to take this allowance the amount has to have been determined prior to being paid. However, he is being told that we can still claim this allowance. Do you know if this is true, and if so how? Do I put the amount in Other Deductions?

---

Your understanding is correct, whatever advice he is being given is wrong.  A clergy housing allowance must be declared in advance and in writing.  There is no legal or tax method or ability to deduct those expenses from the wages once paid.

I would certainly look into getting that form back and making the election going forward.  I can't really think of any downside to having part of his salary declared as a housing allowance.  

[jeanninecary]

Thank you!