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Switch Yth Pastor from payroll to solely untaxed housing allowance
Posted: Mon Apr 27, 2020 2:34 pm
by Lighthouseag
Our Youth Pastor has just purchased a house. The board has approved to move him from a weekly salary to just being paid weekly and designated as housing allowance. Is there somebody who can give me a tutorial on how to switch his pay correctly. He was paid weekly untaxed (pastor) and just had parsonage allowance added on his w2.
Sue
Re: Switch Yth Pastor from payroll to solely untaxed housing allowance
Posted: Mon Apr 27, 2020 4:57 pm
by NeilZ
Lighthouseag wrote: ↑Mon Apr 27, 2020 2:34 pm
Our Youth Pastor has just purchased a house. The board has approved to move him from a weekly salary to just being paid weekly and designated as housing allowance. Is there somebody who can give me a tutorial on how to switch his pay correctly. He was paid weekly untaxed (pastor) and just had parsonage allowance added on his w2.
Sue
Sue,
If he was getting Housing Allowance previously, all you have to do is add the amount he used to get as salary to the housing allowance's pay item, and set the Salary pay item to zero.
So .. if he was getting $500 a week for salary, and $100 for housing, then going forward you will change the salary in the pay item to $0.00, you will get a popup asking if you want to add this to the salary history, I would say yes. You'd then add the $500 to the Housing Allowance pay item so it will now show $600.00 as housing.
Re: Switch Yth Pastor from payroll to solely untaxed housing allowance
Posted: Wed Apr 29, 2020 12:13 pm
by Lighthouseag
Thanks Neil. Payroll was not set up to pay him housing allowance. We just manually added it to his w2. As far as I can tell there is not housing allowance set up in our system.
Re: Switch Yth Pastor from payroll to solely untaxed housing allowance
Posted: Wed Apr 29, 2020 7:32 pm
by NeilZ
Lighthouseag wrote: ↑Wed Apr 29, 2020 12:13 pm
Thanks Neil. Payroll was not set up to pay him housing allowance. We just manually added it to his w2. As far as I can tell there is not housing allowance set up in our system.
You would then create a new income item for Housing. If your state does NOT tax housing allowance, then just follow the directions on page 304 of the PCPlus V12 manual. On step 6 there just select Housing Allowance.
If your state DOES tax housing, then on step 6 select the MORE OPTIONS selection. You'll then see all the various payroll taxes you have setup (Feb, SS, state, local, etc) Just select the state income tax from the list, along with local if they also tax housing.
Does this help?