How do I enter clergy housing allowance from my retirement income?
If you're eligible to exclude a housing allowance from taxable income and received a Form 1099-R from your church, enter this allowance in one of the following ways:
If 1099R Box 2b is Checked:
If your Form 1099R has Box 2b checked, enter the entire form on Menu Path: Income > Common Income > Retirement Income (1099-R). Make sure to subtract your housing expenses from the gross distribution amount in Box 1 and enter the result in Box 2a. If your housing expenses are greater than the amount shown in Box 1, enter 0 instead of a negative amount.
For example, your church gave you a housing allowance of $7,000 for part of your pay for past services. You had $6,000 in actual housing expenses. Your housing allowance is reported to you on Form 1099R with $7,000 in Box 1 and Box 2b was checked. You'd enter your Form 1099R as you received it, but then you'd also make sure to enter $1,000 in Box 2a because your housing allowance was more than your housing costs ($7,000 - $6,000 = $1,000).
If 1099R Box 2b is Not Checked:
If your Form 1099R does not have Box 2b checked, enter the entire form on Menu Path: Income > Common Income > Retirement Income (1099-R) exactly as shown on your form. You can then enter the housing allowance on Menu Path: Income > Uncommon Income > Other Income as "Miscellaneous Income" with the description "Retired Clergy Housing Allowance". Enter your housing allowance as a negative number, but do not enter more than the gross distribution amount shown on your Form 1099R, Box 1.
For example, your church gave you a housing allowance of $5,000 for part of your pay for past services. You had $8,000 in actual housing expenses, so your entire $5,000 of housing allowance can be excluded from income. Your housing allowance is reported to you on Form 1099R with $5,000 in Box 1 and Box 2b is not checked. You'd enter your Form 1099R as you received it, but then you'd also go to the Other Income area of the software and enter your housing allowance again as -$5,000 of "Miscellaneous Income". This will make the entire amount nontaxable on your return.
If you have W-2 Clergy Wages or Self-Employment Clergy Income, you should enter your housing allowance elsewhere.
If 1099R Box 2b is Checked:
If your Form 1099R has Box 2b checked, enter the entire form on Menu Path: Income > Common Income > Retirement Income (1099-R). Make sure to subtract your housing expenses from the gross distribution amount in Box 1 and enter the result in Box 2a. If your housing expenses are greater than the amount shown in Box 1, enter 0 instead of a negative amount.
For example, your church gave you a housing allowance of $7,000 for part of your pay for past services. You had $6,000 in actual housing expenses. Your housing allowance is reported to you on Form 1099R with $7,000 in Box 1 and Box 2b was checked. You'd enter your Form 1099R as you received it, but then you'd also make sure to enter $1,000 in Box 2a because your housing allowance was more than your housing costs ($7,000 - $6,000 = $1,000).
If 1099R Box 2b is Not Checked:
If your Form 1099R does not have Box 2b checked, enter the entire form on Menu Path: Income > Common Income > Retirement Income (1099-R) exactly as shown on your form. You can then enter the housing allowance on Menu Path: Income > Uncommon Income > Other Income as "Miscellaneous Income" with the description "Retired Clergy Housing Allowance". Enter your housing allowance as a negative number, but do not enter more than the gross distribution amount shown on your Form 1099R, Box 1.
For example, your church gave you a housing allowance of $5,000 for part of your pay for past services. You had $8,000 in actual housing expenses, so your entire $5,000 of housing allowance can be excluded from income. Your housing allowance is reported to you on Form 1099R with $5,000 in Box 1 and Box 2b is not checked. You'd enter your Form 1099R as you received it, but then you'd also go to the Other Income area of the software and enter your housing allowance again as -$5,000 of "Miscellaneous Income". This will make the entire amount nontaxable on your return.
If you have W-2 Clergy Wages or Self-Employment Clergy Income, you should enter your housing allowance elsewhere.
