clergy housing allowance not reducing W-2 income on return

[suesue1]

Clergy client has W-2 form all of which is designated housing allowance. Recorded that on W-2 worksheet but it's not adjusted out of total W-2 wages. Amount was listed as wages on W-2 with FICA & M/C withheld and housing allowance listed on Part II Line D & E. Still shows as taxable wages on the #1040.

[lfallin]

on the bottom of the w2 form on proseries there is a place to indicate that the income/housing is a clergy and not taxable.  It is way down at the bottom of the screen, and they do not usually pay social security or medicare tax on that as well.

[dascpa]

Years ago I was told to add a Misc Stmt to the tax return stating that the income was not taxable under Section 107 of the Code.

[suesue1]

I am not seeing that.