How is Housing Allowance Reported on Form 941?

by Karleeall
(New Hampshire)

How and on what line is housing allowance reported on Form 941? Also is this amount reported on Line 2 on Form 941?

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Comments for How is Housing Allowance Reported on Form 941?

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Correction Required
by: Vickey

If housing allowance payments were reported in taxable wages (Box 1 of a W-2) or in a 1099... you will need to amend the W-2 and quarterly 941s or 1099.

If not corrected ...those payments will be treated as "regular" taxable income and he will pay income tax...in addition to the self employment tax.
what to do if house allowance was submitted
by: Anonymous

What to do if House Allowance was submitted as wages and compensation when reported.
Does the pastor will have to pay taxes on the whole amount reported or can still use the house allowance?
Retroactive HA never allowed
by: Larry P

Housing allowance per IRS rules must be designated and paid prior to expenditures and is never retroactive. Line 2 on the 941 therefore is never reduced for omissions for prior quarters. It is too late at the time W2s are prepared for changes in designations for that year just ended.
HOUSING on 941
by: Anonymous

what if the minister declares the housing allowance he wants when W-2's are being done and the allowance makes the 4th qrt line 2 on form 941 a negative because housing was never taken out of the other 3 quarters? Do we need to amend the other 3 quarters so the W-3 matches before we sent in the 4th quarter 941?
HA on 941
by: Anonymous

Thank you, I haven't included our Pastors HA before & started second guessing myself. Thanks for the clarification.
Do NOT Report a Housing Allowance on Form 941
by: Vickey

Nick is right. You do not report a housing allowance or parsonage FRV on a Form 941.

A 941 is a federal form used to report wages and withholding...not a housing allowance.

See this page for instructions on how to report a housing allowance: https://www.freechurchaccounting.com/housingallowance.html

However, please be aware that ministers do owe self-employment taxes on the lesser of the 3 amounts shown on that page and then as Nick stated, you would need to report the excess HA payments (if any) as income and pay the appropriate taxes on it.
Housing Allowance
by: Nick

Housing Allowance is not reported on Form 941. It is excluded from income reporting by the church. It is only taxable to the minister if it exceeds the amount spent for qualified housing expenses or the fair rental value of the home plus utilities.

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