Clergy - Housing allowance

[ILLMAS]

I am trying to reconcile 941's for a church/school against wages reported on the P&L, I am coming up with a difference that seems to be coming up from housing allowance, should the housing allowance be reported on as a separate expense "Housing Allowance", because I don't see it reflected as taxable or exempt wages on the 941's?

Thanks

MAS

[Medlin Software, Dennis]

It a proper HA, it is not part of payroll reporting, such as on a 941. It is certainly an expense, but probably best kept separate from PR to avoid any issues of it getting mixed in with PR reporting.

(IMO Ideally HA is kept completely out of PR. Paid through AP, separate statement at the end of year - not added to Box 14 of W-2, all filed nicely with the annual authorization from the church showing the amount.)

[kcjenkins]

It is not part of "Wages", either taxable or exempt. It's a separate animal entirely.

[ILLMAS]

Thanks to both, just one more question, how should the church be reporting the housing allowance at the end of the year 1099?

[Jack from Ohio]

Call me MAS! You have my number.

[MAMalody]

Most churches very simply issue a W-2 to their pastor at the end of the year. Although, not required, most tend to put the housing allowance in box 14 of the W-2. Your ATX software is designed to handle it in this box. The church puts the cash salary in box 1 of the W-2. Generally boxes 2-6 are left blank.