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Clergy, minister, or missionary wages are reported on Form W-2 Wage and Tax Statement. Those wages are subject to self-employment taxes, but no FICA (Social Security and Medicare) taxes are withheld.

See Form W-2 - Entering in Program

If there are no Social Security and Medicare tax withheld (reported in Boxes 4 and 6 of Form W-2, respectively), then the screen titled Minister or member of the clergy? will appear.

Clergy housing allowance

Generally, the housing allowance is reported in Box 14 of the W-2 and is not included in Boxes 1, 3, or 5. The fair rental value of a parsonage or the housing allowance can be excluded from income only for income tax purposes.

No exclusion applies for self-employment tax purposes. Therefore, TaxAct requires that the housing allowance be entered on the Self-Employment Tax Adjustment Worksheet for calculation of the SE tax.

To enter the housing allowance:

  1. From within your TaxAct return (Online or Desktop), click Federal. On smaller devices, click in the upper left-hand corner, then click Federal.
  2. Click Taxes in the Federal Quick Q&A Topics menu to expand, then click Self-employment tax adjustments.
  3. Continue with the interview process to enter all of the appropriate information.
  4. On the screen titled Self-Employment Tax - Housing Allowance, click Yes, then continue with the interview process to enter all of the appropriate information.

The allowance is then transferred to Schedule SE Self-Employment Tax, Section B, Part I, Line 2 for calculation of the SE tax, but will not be added to the income on Form 1040 U.S. Individual Income Tax Return.

Excess housing allowance is generated when the housing allowance the clergy member received from the church or organization is more than the amount actually used to provide a home. The excess housing allowance will transfer to Form 1040, Line 8.

Note that any link in the information above is updated each year automatically and will take you to the most recent version of the document at the time it is accessed.

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