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Clergy W-4 Deductions, Adjustments, etc.

New to the IRS's minister tax code, I am wondering what I enter under the "Deductions, Adjustments, and Additional income" section of the W-4. Is this where I enter my housing allowance allocation?


  • David WarrenDavid Warren ✭✭✭✭

    Not!!!!! my area of expertise, but my understanding is that if you have "income/wages" that is inherently non-taxable, that income is not taxed period, no matter what the W-4 says. Now it has been a very long time since I looked at the clergy rules, and I was not all that good at them back then. I remember exceptions exists, but not what the rules are. I am sure that none of the rules invoice playing games with the W-4. The W-4 rules apply to taxable wages only, and have nothing to do with non-taxable income/wages. Assuming the housing allowance is non-taxable. Which I do not know as a fact. Have you tried talking to the church's payroll office yet? They are the ones who are supposed to know what rules specific to their organization is. Point of fact if you get a copy of The Payroll Source Book, there are a truly huge number of exceptions detailed. Almost none of which I know off the top of my head since they only effect very specific employers.

    I remember many years ago where someone was insisting that there was a fishing exception, and when we could finally get him/her to answer questions, it turned out to be a non-profit fishing co-operative and the exception they were looking for had nothing to do with fishing and everything to do with the non-profit co-operative.

    Details are everything with tax exceptions. If you cannot get your church's payroll department to help you, then download the IRS publications and carefully read them. I remember a half dozen clergy specific rules, but these were VERY restrictive in their application. I wrote an article on this stuff maybe 15 years ago, but it took me several days to download and read the related IRS publications and write the article. Then, completely done with the subject until today.

  • See IRS Publication 517 Social Security and Other Information for Members of the Clergy and Religious Workers. It does not discuss Form W-4, but if your housing allowance is properly designated by the church, the church should not include it in your gross income. On that basis, you should not subtract it in determining your W-4 allowances for your salary as it was never included in your salary. If you do that, you will understate your salary for withholding purposes. If the church does not properly designate it, then it is taxable for income tax purposes and should not be an adjustment on Form W-4.

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