I'm at"Other Adjustment Income" under State Tax to report Clergy Housing Allowance, do I enter on Subtraction side or Addition Side? Neg 24K or Pos 24K amount? Pl thx

[Opus 17]

Why do you think you need to report it on your state return?

[prettymag]

I don't need to then?

[Opus 17 · Accepted solution]

On the federal level, your housing allowance is subject to SE tax but excluded from income tax. Most states follow the federal definition of taxable income, although some states do add back items that are excluded from federal tax (such as California does not allow HSA contributions to be excluded from income, there is an add-back provision in the state interview.)

I don't know of any state that requires the housing allowance to be added back to taxable income, and this clergy guide doesn't mention it.

http://www.ecfa.org/PDF/2018-Ministers-Taxes-Made-Easy.pdf

If you think your state requires the add-back, you would need to check your state's tax department web site.  Or, be very careful and thorough when doing your state interview in turbotax and review the "state additions to income."  Go through the list carefully and see if it asks anywhere for housing allowance.

[Stefflee]

The State of Pennyslvania requires you to pay tax on housing allowance.  See below:

All housing allowances provided by the congregation to clergy are taxable as compensation, as cash is always taxable. The clergy may deduct directly related business expenses (such as the business use of the house) allowed on PA-40 Schedule UE, Allowable Employee Business Expenses.