Housing Allowance reported on 941, file a 941-x to amend or just leave it?

So our pastor moved into a new home in September and had housing expenses. We are allowing him to claim housing allowance.

I filed the quarterly 941 and accidentally included the part of his income that is housing allowance in the total amount reported.

Should I just go back and file an amended 941-x to correct the federal wages report?

I'm not 100% sure because the form talks about reimbursement and what not, but we are not reimbursing anything I would just be reporting another federal amount. Is this the right way to proceed?

Comments for Housing Allowance reported on 941, file a 941-x to amend or just leave it?

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Jan 23, 2023

Housing Allowance is Nontaxable Income
by: Vickey

You must file an amended 941 as the amount of your pastor's compensation that was designated and paid as a housing allowance should not and CANNOT be reported on the 941 quarterly form as it is considered nontaxable income by the IRS.

You also will not report it in Box 1 of his W-2.

Your W-2s must match your 4 quarterly 941s.

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If you want to DIY your payroll, I highly recommend you look at using Gusto! It is very user friendly and their support is awesome! Plus they know how to set up and maintain payrolls for churches and nonprofit organizations.

Note: I am a "partner" of Gusto, but as I have told you before ... I never recommend anything that we or our clients have not tried and love =)

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