Clergy W-2 questions

[kamckinley]

I have a couple of questions about a client's W-2. He is ordained clergy and receives a housing allowance. He said his church also pays for half of his SE tax. From my research it looks like if the church pays for half of the SE tax it is added to wages in box 1 of the W-2, do I understand this correctly? Also, the minister told me how much his housing allowance was, but it is not reported in box 14 as it should be. Does that matter? Do I need to have the minister get a corrected W-2 or is box 14 just fyi? This is my only clergy tax client, so I could use a little guidance.

Thanks!
Kristine

[Burke]

The church may increase his wages (Box 1) by an amount over and above the base salary figure in order to compensate him for SE tax he has to pay. This is a common practice. He has to pay SE tax on the return using the gross amount. The church is not required to put the HSA in Box 14. Most do and it is a good practice. If it were my client, I would ask for other documentation of this amount; i.e, the church governing board resolution at the beginning of the year as to the amount established as housing. This has to be done every year prior to it being paid, and they usually furnish the minister with a copy.