Premium Tax Credit

[Duane Anderson]

On line 2a of IRS Form 8962 for the premium tax credit, the instructions say certain non taxable income must be added back (like foreign earning income and tax exempt interest).....For a Pastor who has non taxable income (housing allowance) I cannot see in the forms or instructions where this needs to be added back, but wanted to double check since it makes a huge difference in his tax refund...Thanks,,,Duane Anderson

[New York Enrolled Agent]

On line 2a of IRS Form 8962 for the premium tax credit, the instructions say certain non taxable income must be added back (like foreign earning income and tax exempt interest).....For a Pastor who has non taxable income (housing allowance) I cannot see in the forms or instructions where this needs to be added back, but wanted to double check since it makes a huge difference in his tax refund...Thanks,,,Duane Anderson

Here's what the IRC says in §36B - nothing about a parsonage allowance.

(B) Modified adjusted gross income. The term "modified adjusted gross income" means adjusted gross income increased by -

(i) any amount excluded from gross income under section 911,

(ii) any amount of interest received or accrued by the taxpayer during the taxable year which is exempt from tax, and

(iii) an amount equal to the portion of the taxpayer's social security benefits (as defined in section 86(d)) which is not included in gross income under section 86 for the taxable year.