How to enter retired minister housing for 1099R

[ccountryman]

the minister is retired and receives 1099R.  

[qbteachmt]

What is it being paid out of? Who is paying it out? Who paid into it?

https://pastorswallet.com/claiming-a-ministers-housing-allowance-in-retirement/

https://cs.thomsonreuters.com/ua/ut/cs_us_en/ius/proc/retired-minister-housing-allowance.htm

Highlights:

A retired minister may receive rent-free use of a home or a rental allowance in recognition of past services as a minister. The lesser of the designated allowance, the fair rental value of the home, or the actual expense of maintaining the home is excludable from income. The taxable amount of any retirement distribution is reduced by the amount of a designated housing allowance.

Contributions you make to a church retirement plan, usually a 403(b)(9), as a pastor are a part of your pastoral income. So, when you take them out in retirement they are still considered eligible pastoral income. Any pension your church or denomination pays you is something that you earned through your ministerial work and part of your compensation as well. Also, if you use part of your church pension to purchase a commercial annuity, those annuity payments generally qualify for the housing allowance as well, since they were bought with your ministerial income.

You cannot take a housing allowance from an IRA in retirement, even if you used your pastoral compensation to fund it. Neither can you claim a housing allowance from your Social Security benefits, even if you paid into the system as a pastor.

The housing allowance must be officially designated in advance by the employing church or other qualified organization. The IRS has ruled that the board of a national denominational pension fund is qualified to make a housing allowance designation for a pastor. They determined that the pension fund met the requirements of being an “employing church” and the fund trustees were acting on behalf of local churches. Revenue Ruling 63-156 also allows for an independent or nondenominational church to designate a housing allowance for their retired clergy. 

[SLM Financial Services]

My client has retirement payments reported on a 1099-R and properly designated as housing allowance as evidenced by a letter from the retirement board.  How do I enter it into ProConnect?

[qbteachmt]

If the housing qualifies as nontaxable, you report the total from the 1099-R and then the taxable portion.

[SLM Financial Services]

It qualifies as nontaxable to the extent of the lesser of fair market rental plus utilities or actual expenses, and unfortunately some of the designated housing allowance becomes taxable. How do I get this onto a housing allowance worksheet?  I can't find the correct place to input, and I spent 45 minutes on the phone with ProConnect support for him to tell me to just input the taxable amount in Box 2a of 1099-R input screen with no explanation as to how it was calculated. Since this is not the only client I have in this situation, I need to know how to enter it properly showing the Exclusion for Housing Allowance as it should be calculated. Does anyone know how to do this in ProConnect?

[qbteachmt]

"just input the taxable amount in Box 2a of 1099-R input screen with no explanation as to how it was calculated"

Yes, that's what I described.

You might be trying to use the Housing allowance that is part of W2, which also runs into SE issues. A retired (1099-R) housing isn't the same thing.

[JB0816]

Thank you. In the answer, the last paragraph said yes; and the one above it said it cannot. So is it allowed to have a housing allowance for a retired pastor from 1099-R or not ? 

[Terry53029]

@qbteachmt is saying you don't take housing allowance or fill out the worksheet you just take the amount of his allowance from box1, and put the Remainer in box 2a as the taxable amount 

[qbteachmt]

"So is it allowed to have a housing allowance for a retired pastor from 1099-R or not ?"

It's allowed, only if it qualifies. Look at the explanation for how to determine if it qualifies.

Source of funds, such as not allowed from an IRA, is one of the things explained.