February 14, 2011

Housing Allowance Erroneously Reported on Form 1099-MISC

Question:

A minister received a Form 1099-MISC from a church. Most of the amount on the Form was designated as housing allowance (recorded in an official document by the church board when he began working for the church). He doesn't see a way to report this amount on his tax return, excluding it from federal income tax while paying the Social Security and Medicare (self-employment) taxes on it.

How should this be reported? Where does it go on the IRS tax forms?

Answer:

The church has filed an erroneous Form 1099-MISC. Housing allowance is not reportable as taxable income because it is exempt from income tax. The preparer should be apprised of this error and asked to file a corrected Form 1099-MISC. Near the end of the January 29, 2011, blog posting that I've linked below, I address the issue of housing allowance and Form 1099-MISC reporting-perhaps it will be helpful.

Definition of a Minister

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