W-2 and H/A

by Dean
(Alabama)

W-2 and a Housing Allowance

How can correction be made to the W-2 once the treasurer has sent them in?

The Total in box 1 was inclusive with the housing allowance and also listed the housing allowance in box 14.

Am I wrong to think that the IRS now looks at box 1 as the total received from the church when it really was not??

Box 1 is salary only not combined with anything else.

How should the housing allowance be deducted when the 1040 is done?

Vickey's Answer

Your W-2 needs to be corrected by your church. They should file a W-2c. See the IRS site for more information.

The housing allowance should not be included in Box 1 on a W-2. You can include it in box 14 as a courtesy to your minister.

When it comes to reporting it on your 1040, you will include your qualified amount on your Schedule SE.

When it comes to actually claiming the exclusion for the housing allowance…it is limited. See this post for the limitations.

A housing allowance it not a credit; it is an exclusion. There is nowhere to deduct anything. It is simply an exclusion from income tax; however, you do have to pay self-employment tax on it unless you have an approved IRS form 4361 on file with the IRS.


Church Accounting Package