Skip to main content

Legal

Tax & Accounting

Trade & Supply

Risk & Fraud

News & Media

Books

Developers

Federal input screens

Screen Clergy - Minister, Clergy, and Religious Workers (1040)

Overview

Use this screen to calculate taxable ministerial income, deductions, and the net self-employment income for ministers, members of the clergy, and religious workers. The application also uses information in the following screens to complete the Clergy Worksheets.
Folder
Screen
Income
W2
Business
C
Retirement
1099R, 1099R-2
The
C
 screen is classified as minister units when
Minister, clergy or religious worker
 contains an
X
. The
W-2
 screen is classified as a minister unit when
Wage code
 contains code
1
. The
1099R
 screen is classified as a retired minister unit when
Ministerial pension with housing allowance
 contains an
X
.

Parsonage or Allowance Housing Information

Use this section to enter information needed to calculate the percentage of tax-free income and deductions for Schedule C (or C-EZ). This section is also required for the calculation of an excess housing allowance. Any housing allowance that exceeds the fair rental value of the home plus utilities or the amount actually used to provide a home is included in gross income. When the
Parsonage provided by church
 section is complete, the application defaults to using any housing allowance on the
W2
 screen, box 14, code
2
, as a utilities allowance provided in addition to a parsonage. When the
Parsonage or rental allowance provided by church
 section is complete, the application defaults to using the
W2
 screen, box 14, code
2
, amount as a parsonage allowance.
Amounts entered in either of the
Utilities allowance...
 fields in the Parsonage or Allowance Housing Information section of the
Clergy
 screen are allocated to the state in this field. If this field is blank, the application allocates the
Utilities allowance...
 fields to the resident state.
If the statement for box 14 in the
W2
 screen contains
2
 (Housing allowance) amounts, the application accumulates those amounts for the taxpayer and spouse based on the postal code in
State
 in that statement. If the postal code is blank in the box 14 statement, the application allocates the amount to the resident state. If
Parsonage allowance (Force)
 in the
Clergy
 screen contains an amount, the application ignores amounts in the
W2
 screen and uses the postal code in
State
 in the
Clergy
 screen for state allocation of the amount in
Parsonage allowance (Force)
.
  • If this field is blank, the application completes the section of Clergy Worksheet 1 based on data in the
    Parsonage provided by church
     or
    Parsonage or rental allowance provided by church
     subsection in the
    Clergy
     screen. If both sections contain data, both sections of the worksheet will calculate and any housing allowance with code
    2
     in the
    W2
     screen, box 14, is reported as a parsonage allowance on Clergy Worksheet 1, line 4a.
  • If you select
    1
    , the application completes only the Church Provided Parsonage section of Clergy Worksheet 1. Enter data in the
    Parsonage provided by church
     subsection in this screen. The application ignores any data in the
    Parsonage or rental allowance provided by church
     subsection.
  • If you select
    2
    , the application completes only the
    Parsonage
     or
    Rental Allowance
     section of the Worksheet 1. Enter data in the
    Parsonage or rental allowance provided by church
     subsection in this screen. The application ignores any data in the
    Parsonage provided by church
     subsection.
Enter the fair rental value (FRV) of the parsonage provided by the church furnished as part of earnings. FRV is defined in IRS Publication 517 as "As determined objectively and between unrelated parties, what it would cost to rent a comparable home (including furnishing) in a similar location." This amount is reported on Clergy Worksheet 1, line 3a.
Use this field to override (force) the calculated utilities allowance amount. This amount is reported on Clergy Worksheet 1, line 3b. When this field is blank and the
Parsonage provided by church
 section is completed, the application reports amounts that are entered and coded
2
 (housing allowance) in the statement attached to box 14 in the
W2
 screen for all minister units of the
W2
 screen. The
W2
 screen with code
1
 entered in
Wage code
 are classified as a minister unit.
Enter the actual utility cost for the year. This amount is reported on Clergy Worksheet 1, line 3c.
Use this field to override (force) the calculated parsonage allowance amount. This amount is reported on Clergy Worksheet 1, line 4a. When this field is blank, and the
Parsonage or rental allowance provided by church
 section is blank, the application reports amounts that are entered and coded
2
 (housing allowance) in the statement attached to box 14 in the
W2
 screen for all minister units of the
W2
 screen. The
W2
 screen with code
1
 entered in
Wage code
 are classified as a minister unit.
Enter the utilities allowance provided separately from the parsonage allowance. The allowance will need to be furnished as part of earnings. This amount is reported on Clergy Worksheet 1, line 4b.
Enter the actual parsonage expense for the year. This amount is reported on Clergy Worksheet 1, line 4d.
Enter the fair rental value (FRV) of the home. FRV is defined in IRS Publication 517 as "As determined objectively and between unrelated parties, what it would cost to rent a comparable home (including furnishing) in a similar location." This amount is reported on Clergy Worksheet 1, line 4g.
Enter the actual utility cost for the year. This amount is included on Clergy Worksheet 1, lines 4e and 4g.

Self Employment Information

Enter
X
 if Form 4361, Application for Exemption From Self-Employment Tax for Use by Ministers, Members of Religious Orders and Christian Science Practitioners, has been filed with the IRS for the taxpayer and/or spouse. If
X
 is entered in this field, the message "EXEMPT-FORM 4361" prints on the line to the left of Form 1040, Schedule 4, line 57.
Use this field to override (force) the calculated minister W-2 salary. This amount is reported on Clergy Worksheet 1, line 1. When this field is blank, the application reports the amount in
Wages, tips
 on the
W-2
 screen when code
1
 is entered in
Wage code
. The total of all minister W-2 units is reported on Clergy Worksheet 1, line 1.
Enter the amount of a deductible contribution made by a self-employed minister to a qualified 403(b) retirement plan. This amount transfers to Schedule 1 (Form 1040 or 1040-SR), line 15. The application doesn't calculate any limitations or maximum contributions for this field. See Pub. 571 for information on figuring the maximum amount contributable (MAC) and specific information for self-employed ministers. For a chaplain who isn't required to complete the Clergy Worksheets, use the statement
Other adjustments
 on the
OtherAdj
 screen in the 1040 Adjustments folder to enter deductible contributions to a 403(b) plan, Type code 5, that transfer to Schedule 1 (Form 1040 or 1040-SR), line 22.
Enter the unreimbursed employee business expenses incurred by a minister or clergy member. The unreimbursed expenses will reduce the net self-employment income reported on Schedule SE.
Chat now

error-icon

Triva isn't available right now.

Check out the support page for our phone number and hours

error-close