MUST HAVE REFERENCE GUIDE

Site Map or Site Search

CHURCH ACCOUNTING PACKAGE

Can Box 1 include Housing Allowance?

by R Kreider
(Philadelphia, PA)

I have previously read "do not include clergy Housing Allowance in Box 1 taxable income" so I know that's the recommendation.

However, if this does happen (our payroll service created W-2's including it in box 1 but not box 14) will it cause problems, as long as the pastor can deduct the appropriate amount from taxable income reported on SE forms?

Pastor is aware of the approved amount, and has a letter of documentation.

Comments for Can Box 1 include Housing Allowance?

Click here to add your own comments

Feb 07, 2021
 Issues from Reporting Housing Allowance in Box 1 of W-2
by: Vickey

Yes. It will cause issues for the minister. He will be required to pay income taxes as well as the SE tax on the total amount reported in Box 1 of a W-2.

Since a housing allowance is exempt from income taxes (in most states), he will be incorrectly paying additional income taxes.

Please contact your payroll provider. They will have to file corrected returns for all 4 quarterly 941s for the prior year and a corrected W-2.

If it is their error (you told them it was a housing allowance for a minister) ... they will have to file those corrected forms free of charge.

If it was your error, you will be responsible of the fees and charges to file those corrected forms.

Click here to add your own comments

Join in and write your own page! It's easy to do. How? Simply click here to return to Housing Allowance.



Need training on how to use QBO or Aplos effectively for a church or better yet ...need an expert in either of those accounting software to do your monthly bookkeeping and/or payroll? See more on our accounting services!

Contact Me!






Enjoy this page? Please pay it forward. Here's how...

Would you prefer to share this page with others by linking to it?

  1. Click on the HTML link code below.
  2. Copy and paste it, adding a note of your own, into your blog, a Web page, forums, a blog comment, your Facebook account, or anywhere that someone would find this page valuable.