02 Feb How Should Ministers Report the Housing Allowance in Their W-2s?
The designated housing allowance may be reflected on Form W-2 in Box 14 with the notation, “Housing Allowance.” Though not required, this reporting method is suggested by Publication 517.
Or, a church can report the designated housing allowance to a minister by providing a statement separate from Form W-2. This may be in a memo or letter. The statement should not be attached to your income tax returns.
Your church may erroneously include the housing allowance on your Form W-2, Box 1. If this happens, the church should prepare a corrected form.
There is no requirement for the minister to account to the church for the actual housing expenses. Many ministers consider this as an intrusion into their personal finances. However, if the church requires this reporting, based on administrative discretion, the church would prepare Form W-2 with the adjusted housing allowance excluded. Under this approach, the excluded housing is always equal to or less than the housing designation.
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