Pastor Housing Allowance For 2025 Taxes

Hello MisterD,

Regarding the increase in tax due after entering your housing allowance, the housing allowance is excludable from regular income tax, but it is still subject to self-employment tax (Social Security and Medicare). So when you enter it, the software adds it to your Schedule SE calculation, which is likely why your balance due went up. This is correct per IRS rules. https://www.irs.gov/taxtopics/tc417

For your Form 4361 approval, you can enter it in the software by going to Income, then Business Income (Schedule C). From there, click on "Less Common Expenses" and work through the screens until you reach the "Do you have any self-employment adjustments?" page. Indicate that you are a clergy member, then continue to the next screen where you will be asked about Form 4361. Once you indicate that your Form 4361 has been approved, the software will remove the self-employment tax on your ministerial income.

If you need more specific assistance, we recommend reaching out to our support team directly throught the Support Center in your account so that we can better help you with account-specific information.