16396: Clergy Employees - Housing Allowance on Check and Form W-2 (DAS)

In order for the housing allowance to show on a clergy member's check, it will need to be set up as a benefit at Employees > Deductions & Benefits.

If the clergy member qualifies to exclude their housing allowance from their gross income (see Publication 517), select Not Taxed - Apply to Net Pay Only from the Taxing and Income Options drop box and check the W-2 Box 14 box in the Apply To section. 

For more detailed instructions on how to set up benefits or deductions, see Related Links below or the Deductions and Benefits video.

A clergy Form W-2 must not have an amount in box 3 or 5 per the IRS guidelines: "For certain members of the clergy and religious workers who are not subject to social security and Medicare taxes as employees, boxes 3 and 5 of Form W-2 should be left blank. You may include a minister's parsonage and/or utilities allowance in box 14."

• If an amount is populated in box 5 by the program, you will have a validator requesting an amount to be entered in box 6. In order to continue, when processing a Form W-2 for a member of the clergy who meets the requirements listed in the instructions, remove the amounts from boxes 3 and 5 before printing. This will also remove the validator for box.