Parsonage Allowance?

[ecb34691]

Retired minister gets a W2 from Fidelity for nonqualifed plan distribution. Nothing in any other box except box 1.

This money was put into plan by church. Letter from church says they voted to treat it as parsonage allowance per IRC code section 107.

Our conclusion is to enter on line 7 and as a negative on line 21 with explanation/letter attached. Any other suggestions.

But is it subject to SE tax? Nonqualifed plans are not in our understanding. Parsonage allowance is. What do you think?

[Bird Legs]

Housing Allowance

A retired ministers housing allowance is not subject to S E tax.
Only the portion of the allowance that exceeds the expenses of the home are subject to
income tax.
Report it on line 21 with an explanation. Housing allowance $10,000.
Less expenses $10,000. Amount subject to income tax $0.00.
Do not report any of it on line 7.
Also include this explanation: This housing allowance is excludable from taxable
income under the provision of IRC Section 107 as a rental allowance exclusion. As
a retired clergyperson, I am entitled to take this rental allowance exclusion.

[veritas]

Read pg 14-5 of TTB

Parsonage allowance
Retired ministers