How do I enter a parsonage or housing allowance reported on a W-2?
If you're not already on the W-2 entry screen, open your return. (To do this, sign in to TurboTax and click the orange Take me to my return button.) Then search for "W-2" or "W2" (lower-case also works) and click the "Jump to" link in the search results. Follow the instructions to import or manually enter your W-2.
- When you get to Box 14, enter CLERGY HOUSING, followed by the amount, and then select the last item in the drop-down which is Other - not on the list above. Click Continue.
- If you get additional screens, answer those questions.
- When you reach the Do any of these uncommon situations apply to this W-2? screen, check the 4th box for Religious employment, then click Continue.
- On the following screen, select You earned this income for clergy employment and click Continue.
- Enter your allowance on the Tell Us About your Clergy Housing screen. For Qualifying Expenses, enter the lesser of:
- Your qualified housing expenses;
- The fair rental value of your housing expenses; or
- Your housing or parsonage allowance. (Housing allowance – qualifying expenses = taxable income)
- Click Continue, and on the Clergy Self-Employment Tax screen, select the appropriate option and click Continue again.
You will now be on the Here's your W-2 info screen. Click Edit to view your W-2 information. If the Box 1 amount hasn't been adjusted for your housing allowance, enter a Line 21 adjustment to income. Here's how:
- Search for "other reportable income" and then click the "Jump to" link in the search results.
- Answer No to Did you receive any other wages? and click Continue.
- Scroll all the way to the bottom of the Let's Work on Any Miscellaneous Income screen and click Start next to Other reportable income.
- Answer Yes, and on the Other Taxable Income screen, type Clergy Housing Allowance in the description and enter it as a negative number (precede it with a minus sign, e.g. -10,000).