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Shantel72
Level 1

How do I enter a Housing Exclusion for Clergy? This is not an allowance but an exclusion on reportable income at end of the year on their w2.

Need help if anyone knows how to enter this into Online Payroll. This amount is included in Box 14 as Housing Exclusion and reduces the box 1 reportable income. It is not deducted from their salary as they are paid throughout the year.
5 Comments
ShiellaGraceA
QuickBooks Team

How do I enter a Housing Exclusion for Clergy? This is not an allowance but an exclusion on reportable income at end of the year on their w2.

You've come to the right place, @Shantel72.

 

I'm more than happy to walk you through the steps on how to record your clergy housing exclusion. You can choose between Clergy Housing (Cash) or Clergy Housing (in-Kind). The taxability of the two clergy housing pay types is identical, and both will show in box 14 of Form W-2. Let's go to your employee's profile to set up.

 

Difference between the two:

 

  • Cash: A ministry gives funds to a clergy member through payroll to pay for their own housing. 
  • In Kind: A ministry provides housing to a clergy member and only needs to report the amount on Form W-2 without increasing the net of the paycheck.

To set up:

 

  1. Go to Workers, then hit Employees.
  2. Choose an employee and Edit employee.
  3. Select the Pencil icon next to Pay.
  4. Under How much do you pay Employee?, tick Add additional pay types.
  5. Click Even more ways to pay Employee.
  6. Choose either Clergy Housing (Cash) or Clergy Housing (In-Kind).
  7. Hit Done.

You can refer to this article to guide you along the way: Clergy and church payroll.

 

Additionally, here's a link that covers all tasks you can do when using the payroll feature.

 

Feel welcome to message me if you still have questions or concerns with payroll. I'm always here to assist you. Stay safe and have a great day ahead.

Shantel72
Level 1

How do I enter a Housing Exclusion for Clergy? This is not an allowance but an exclusion on reportable income at end of the year on their w2.

Thank you but that doesn't work. I currently have it set up as Housing Allowance in Kind as she doesn't' receive any additional funds.  But when I run the W2 it does not reduce the taxable income by that amount.

This is a Housing Exclusion, not an allowance.  So she receives a Salary that we then pull payroll taxes out of during the year.  However, at the end of the year, she is allowed to "exclude" a portion of her taxable income as Housing costs - this is reported in Box 14 but is noted as housing exclusion.  This is what I am trying to get set up. If you go to this link it will show you the difference between housing allowance and housing exclusion on a clergy W2.

https://www.westohioumc.org/sites/default/files/conference/documents/pdf/page/2020-clergy-example-w2...

MaryAnn_E
QuickBooks Team

How do I enter a Housing Exclusion for Clergy? This is not an allowance but an exclusion on reportable income at end of the year on their w2.

Hi there, @Shantel72.

 

Please contact our Payroll Support so they can check your payroll data and assist you further. This way they can check for a correction on the W-2 form.

 

Let me guide you on how to reach them.

 

  1. Go to (?Help, then Contact us.
  2. In What can we help you with? field, enter a brief description of your issue.
  3. Click Let's talk.
  4. Snap the Get a callback button.

 

Should you not see the option for Get a callback, you can toggle the option by entering Support in How can we help?.

 

I'm also attaching this article for your reference: Commonly used articles to get started with Payroll.

 

In addition, you can find articles that cover common questions in QuickBooks Online at the following link: Helpful Articles.

 

Fill me in if you have other questions and concerns. I'd be glad to help. Thank you for posting and have a good day.

Shantel72
Level 1

How do I enter a Housing Exclusion for Clergy? This is not an allowance but an exclusion on reportable income at end of the year on their w2.

I would like to update the community that if you are using the online payroll system for your church payroll, QB can not set up a housing exclusion, only the allowance. To do the exclusion through online payroll, submit the w2 through QB and then create a corrected copy and submit that through Social Security Administration.  I will warn you that it does create some additional paperwork in the end SSA always questions and wants confirmation of what you changed.  I will be looking for a different payroll service as I have 2 individuals that this pertains to and it isn't worth the work and confusion to continue doing what I am doing.  I believe that if you are using the desktop version you can make the changes before submitting it.  I do want to thank the Quickbooks team for helping me and the due diligence that the individual, Josh, did to try and get this solved.

Shantel72
Level 1

How do I enter a Housing Exclusion for Clergy? This is not an allowance but an exclusion on reportable income at end of the year on their w2.

I just wanted to confirm with everyone in the community that a Housing Exclusion is not possible through QuickBooks online payroll.

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