Example Pastor's W-2

by Ron

Why isn't the HA(6000) subtracted from salary when calculating the amount for Box 1?
It's indicated elsewhere that it should be.

Vickey's reply: The $6,000 is a Social Security Allowance and is fully taxable to the recipient.

Some churches give their ministers additional pay to help with the minister being fully responsible for his Social Security and Medicare tax and that is perfectly legal; however, it is also fully taxable on an income level and SS level (if the minister has not opted out of SS).

Most "allowances" such as a SS Allowance and a car allowance is fully taxable and will be reported in Box 1 of a W-2, except for the housing allowance.