Clergy housing allowance

[superman]

I have a client that is working part time at a church and they designated all of his income as housing allowance. On the w2 box 1 reads zero and the allowance shows up in Box 14.

The question I have is box 4 and box 6 is double the normal rate of withholdings and I assume this is to cover the SE tax that the housing allowance triggers.

I use Drake and can not find a place to imput this withholding already paid. Is there anyone else that use Drake and can tell me what screen to imput this into. Always something a little strange in the program.

Superman

[MAMalody]

The W-2 is filled out incorrectly. For a dual-status pastor that qualifies for a housing allowance, the only boxes normally filled in would be box 1, 12 and maybe 14. If the pastor asks the church approves, he could have withholding is box 2. In all case, box 3, 4, 5, 6 would be empty. I have discussed this with a number of tax attorneys that specialize in clergy taxes and they tell me that if boxes 3-6 are filled in they are not considered to be dual status and do not have the advantage of a designated housing allowance. I would ask that they church correct the W-2 and file amended 941s. I also encourage them to give the pastor the amount they put in for their portion of taxes so that the gets that benefit. Of course, they have to be added into box 1 as additional income.