Should total wages reported on w-2 box 1 include housing allowance?

by ed
(Phoenix AZ)

In box 1 of my w-2 the church reported my total wages to include my housing allowance. I am a full time pastor. I thought box one should only report wages minus housing allowance. Is this correct?

I am a newly ordained pastor, can you recommend a solid tax resource to help me figure out all of the tax laws related to full time ministers?

Answer

Your W-2 in incorrect and needs to be corrected as soon as possible hopefully before your church sends in the W-3 form.

The church is not required to report the minister's housing allowance to the IRS. However some churches choose to report it in Box 14 of the minister's W-2 (which is labeled “Other”) as a courtesy to the minister.

Or, churches can just include the amount of the HA in a separate letter to the minister. (This separate letter should not be sent to the IRS and will not be included or attached to the minister's personal tax return.) (Taken from housing allowance page.)

Under no circumstances should your housing allowance be included in with your wages in box 1 of your W-2.

I found this site NewMinisters.com to be a very good resource for new ministers.

Also this book is a good resource for ministers and their taxes: Zondervan 2010 Minister's Tax and Financial Guide: For 2009 Tax Returns

Hope this help,



Church Accounting Package

www.freechurchaccounting.com