We received housing allowance from the church we work for and they paid in money and gave us a W-2 (no withholding). When we file, it says we still owe. Is this accurate?

[Opus 17]

Unless you made large estimated payments, yes.

Clergy are self-employed for certain income tax purposes.  They don't pay mandatory withholding, but must pay self-employment tax using schedule SE.  The housing allowance is exempt from income tax but is not exempt from self-employment tax.  If your housing expenses were less than the housing allowance, the difference is added to the taxable income.  Because there is no withholding, you will owe all those taxes at the end of the year unless you make estimated payments.

With a W-2, the housing allowance should not be in your box 1 wages.  It might be in box 14 or it might be reported to you in a separate memo from the treasurer.  In turbotax after entering the W-2, check the box for "religious wages" on the page of special circumstances.  Answer the question about SE tax as "pay on both wages and housing" (for 99% of all situations), then enter the amour of the housing allowance and your qualified expenses, even if it was already entered from box 14.

See this for more help on clergy taxes.

http://www.ecfa.org/PDF/2017-Ministers'-Taxes-Made-Easy.pdf

https://www.irs.gov/uac/about-publication-517

Clergy FAQS https://ttlc.intuit.com/replies/3302256