Clergy tax problem -- error when trying to file

[jw1578]

I'm a licensed minister (dual-status employee with a housing allowance) who works for a ministry organization, but I became licensed in February. Therefore, there was a little bit of money withheld for Federal, State, Social Security and Medicare for the month of January when I was still just a W-2 employee. But, from February onwards there was no money withheld from my paycheck -- rather, I had to start paying estimated quarterly taxes.

TurboTax won't let me file my tax return, and keeps giving me this message, "Housing W-2 Box should not be checked if social security or Medicare tax has been withheld on this W-2."

The problem is, my missions organization sent me one W-2 that has my housing allowance on it and all the money I made last year, plus the money that was withheld in January. I've asked them if they can send me two W-2s instead, one being the month I wasn't licensed, and one being the month that I was licensed. But they said they are unable to do that, and recommend I see an accountant rather than use TurboTax because of this situation.

Since I've already spent more than $100 on TurboTax, I just wanted to check. Is there anything I can do on my end about this error, or will I just need to have an accountant file this year?

[MaryK4]

You can bifurcate the W2 entries.  Enter the January information on the W2 entry.  Next, Add a W2 with the February and later info.  On the " Let's check for uncommon situations" indicate Didn't get a W2 or received an incorrect W2 (manually calculate my earnings) and Religious Employment.  You will be asked if you want to certify and submit the 4852, which is a substitute W2 which is generally used when you do not receive a W2--SAY NO!  When you have finished the entry, the income will still be included on your return.  Check it over carefully, and post back here if you have any issues (and tag me) and I will see if I can help.

[Opus 17]

Agreed.  Create 2 "fake" W-2s, one using the pre-license information and one using after-license information with the housing allowance. 

[aheiler34]

Is splitting the W2 legal for dual tax status and complications? It says enter exactly as is on the W2. I understand that if it adds up then it is the same and actually an attempt to pay taxes correctly. I have the same situation that TT Premier 2025 isn't handling correctly at all. The clergy interview is absent. Any information on updates coming? When?

Thanks,

Dre

[Opus 17]

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@aheiler34 wrote:

Is splitting the W2 legal for dual tax status and complications? It says enter exactly as is on the W2. I understand that if it adds up then it is the same and actually an attempt to pay taxes correctly. I have the same situation that TT Premier 2025 isn't handling correctly at all. The clergy interview is absent. Any information on updates coming? When?

Thanks,

Dre

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If you are in a situation where you were a regular employee for part of the year (with regular withholding of social security and medicare tax) and a clergy employee of the same organization (with no withholding of social security and medicare), turbotax can't prepare a correct return automatically.  The only way to get Turbotax to work is to split your W-2 into two--one for regular employee and one for clergy employee. This is the routine way to do it.  I don't know if it increases your risk of audit, it's just the only way it works.  The IRS is mainly going to be concerned that your box 1 and box 2 numbers add up.

I have not checked to see if the housing allowance question is enabled yet, there's no reason it wouldn't be since it hasn't changed from last year.  When entering the clergy W-2, there should be a page listing special circumstances -- check the box for religious wages.  (Do not check this box for the W-2 that covers wages you were paid as a lay person.)