Retired Pastor Housing allowance

[RtrdPstr19]

I am a retired pastor in the West Ohio Conference of the United Methodist Church. I filled out my Turbo Tax Deluxe and filled in the amount of my housing costs for the 2020 year, yet when I continued, that amount was not deducted from my retirement income as stated in the resolution of our West Ohio Annunal Conference within the meaning of Internal Revenue Code section 107, which says that my pension income from Westpath investments is deferred compensation. 

Please tell me how to get the amount of my pension deferred in your program.

Thank you,

Ruth A Solo

[DianeW777]

@Opus17 provides some guidance with the steps to handle your situation and complete your tax return.

How to enter a RETIRED clergy housing allowance - Form 1099-R  

The IRS allows a housing allowance to retired ministers to the extent the recipient can justify the amount. Should you receive more than you can justify, the excess should be considered taxable.

You may include this statement with an electronically filed return using the instructions below.

1. You may file a paper return with an attachment stating that you received an exempted housing allowance as a retired clergy member.  Be sure to include the amount received. You should keep documentation in your records to justify the amount of the housing allowance. This subject is covered in IRC Section 107, which you can mention in your statement. 
2. You should have received form 1099-R reporting the distribution.

To access the entry fields for the 1099-R:

1. From within TurboTax, scroll down the Income Summary List
2. In Category Retirement Plans and Social Security  select  IRA, 401(K), Pension Plan Distributions (Form 1099-R).
3. Add a 1099-R to create a new copy of the form or Click Edit to review a form already created.
4. The program will proceed with the interview questions for you to enter or review the appropriate information. Enter the data from the 1099-R except Box 2 information - see next.
5. If Box 2b  is checked [Taxable Amount Not Determined] then  right click the field for Box 2a and select "Add supporting details",

a.    make sure  the "NOT print box is not checked!
b.   In first line of description enter "Taxable amount reported in Box 2a  and in the Amount enter the Box 2 amount.
c.   In the second line enter description "Deduction for Housing Allowance"  and in the Amount enter as a negative the allowance as an adjustment
d.   If the Housing Allowance exceeds the Pension received and a negative sum results, then reduce the 
      Housing Allowance so that  the sum is zero.

If Box 2b is not checked, please enter the 1099-R exactly as it appears on the form. This will cause the full amount to show as taxable. You will make your adjustment in Other Income, following the instructions below:

1. Open your Federal return and choose Wages & Income
2. Scroll down to Less Common Income and Show more
3. Choose Miscellaneous Income, 1099-A, 1099-C
4. Choose Other reportable income, and Start/Revisit
5. Select Yes and you will be prompted to enter Description and amount. Enter the description "Retired Minister Housing Allowance," and enter the amount as a negative number.   

At this point, the form 1040 will show your full pension as taxable, but the negative adjustment on Schedule 1, line 8, which carried to Form 1040, line 8, will remove it from taxation.

[BH77]

I am a retired Pastor living in a Florida community owned by a church. I have a 403b fidelity account that is 100 used for my housing allowance. I figured out my housing allowance used which is $24,810. Last year it seemed easier to simply put -24,810 in a particular place. They seemed to have changed that method so I need guidance to it for my 2021 tax. Please tell me how to do it for 2021 tax?  Thank youi

[ErnieS0]

TurboTax contributor @KittyM provides an excellent answer in How do I enter minister's housing allowance, as a retired minister, when I do not receive a w-2 form...

If there is no taxable amount in Box 2a of your Form 1099-R, enter $0 since 100% of your distribution is a tax-exempt housing allowance.

If the $24,810 is shown as a taxable amount in Box 2a, enter a subtraction in the Less Common income section.

1. Click on Federal in the left column
2. Select Wages & Income at the top
3. Scroll down to Less Common Income
4. Go to Miscellaneous Income, 1099-Am 1099-C
5. Go to Other reportable income
6. Say YES on Any Other Taxable Income?
7. On Other Taxable Income enter "Retired Minister Housing Allowance" in description and the amount in Box 1099-R Box 2a as a NEGATIVE in amount

For more info: FAQ: THE MINISTER’S HOUSING ALLOWANCE