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Level 4
March 11, 2021
Question

clergy housing allowance not reducing W-2 income on return

  • March 11, 2021
  • 3 replies
  • 24 views

Clergy client has W-2 form all of which is designated housing allowance. Recorded that on W-2 worksheet but it's not adjusted out of total W-2 wages. Amount was listed as wages on W-2 with FICA & M/C withheld and housing allowance listed on Part II Line D & E. Still shows as taxable wages on the #1040.

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3 replies

Level 3
March 11, 2021

on the bottom of the w2 form on proseries there is a place to indicate that the income/housing is a clergy and not taxable.  It is way down at the bottom of the screen, and they do not usually pay social security or medicare tax on that as well.

suesue1Author
Level 4
March 11, 2021

I am not seeing that.

dascpa
Level 11
March 11, 2021

Years ago I was told to add a Misc Stmt to the tax return stating that the income was not taxable under Section 107 of the Code.