Do you have to take the Housing Allowance if it was designated by the board?

by Lori
(Janesville, WI)

My question is do you have to take the housing allowance designated by your church board?

My Husband is a pastor and we have 9 children so our standard deduction is nearly $44,000. We only made about $35000. Our board designated us to receive $24,000 in housing allowance and $11,000 in wages on a W2. They did federal withholding of about $2500. My question is can we take the entire amount as wages and not show the housing on the W2.

My husbands salary is so low that for Social Security reasons we would like to show his income being as high as possible and since it will not make a difference to our taxable income can we just take the entire amount as wages? Does this affect any reporting that the church has done through the year? Thanks in advance!