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MequonCPA
MequonCPA, Certified Public Accountant (CPA)
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Filling out the FAFSA. I am a clergyman, and I receive a

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Filling out the FAFSA. I am a clergyman, and I receive a tax-free housing allowance, just like the military (for legal purposes, we are grouped together). On the FAFSA form, it asks for a housing allowance amount, but says if you are in the military, don't count the basic housing allowance or cost of on-base housing. I asked a college FAFSA advisor, and she said not to put my clergy housing allowance on the FAFSA form, because it is counted the same as the military. Is this correct?
Submitted: 3 years ago.
Category: Tax
Expert:  Robin D. replied 3 years ago.

Robin D :

Hello and thank you for using Just Answer

Robin D :

When looking at the tutorial for FAFSA the section for Worksheet B Question 85 says this
"This includes housing or living allowances that are a part of an employee's compensation package. The most common situations are members of the military and clergy although anyone receiving a housing benefit as a part of their compensation will include it here. These amounts may or may not be listed on your W-2 form. Clergy may locate a housing allowance in Box 14 of the W-2. Military personnel will need their LES statement or may access https://mypay.dfas.mil/mypay.aspx. If the amount is not reported on your W-2 refer to your employment contract or ask your employer."

The worksheet is clearly indicating that the housing allowance should be entered on the worksheet.

Robin D :

Here is a link to the FAFSA tutorial
http://www.educationquest.org/fafsa/fafsatutorial.asp?tab=3&yr=1#

Customer:

so why does it say don't count the basic housing allowance or the cost of on-base housing?

Customer:

I read the instructions, too. and they seem to contradict themselves. And why would a college advisor then tell me not to include my basic housing allowance.

Robin D :

I do not know why the person told you to not include it. Maybe they did not read the instructions.

Customer:

I am sorry, but I don't find that kind of answer acceptable. Obviously there are some nuances, and that advisor has been advising for ten to fifteen years. I can't imagine that they didn't read the instructions. I read the instructions, and I have advanced degrees. One sentence seems to say one thing, and the next sentence seems to say something else. I was hoping that you would dig into the reasoning behind the fact that it says to list the housing allowance, but not count a basic housing allowance. Anyone can just parrot back what the instructions say. I want to know why they seem to contradict themselves, and what options are open to me, especially since potentially thousands of dollars of financial aid may be riding on this. If you can dig into this and find out why it says what it says, and come up with a good explanation and and appropriate response, I would appreciate it. If this is beyond your area of expertise, perhaps you might know of someone else I can contact. Thank you.

Robin D :

I will request someone in education look at your information. You are correct this is not a tax issue. Please do not respond to this message. When another expert picks up this question your will receive a message from them.

Expert:  MequonCPA replied 3 years ago.

Hi and welcome to JustAnswer:

 

Below is an excerpt from a FAFSA web page. The parsonage allowance is included. Pertinent section in bold. A link to the actual page is at the bottom.

 

What's the difference between cash support and in-kind support?

A.

Cash support is support given either in the form of money or money that is paid on your (the student's) behalf. You must report cash support as untaxed income. Thus, if a friend or relative gives you grocery money, it must be reported as untaxed income on Worksheet B. If the friend or relative pays your electric bill or part of your rent, you must also report those payments.

Examples of in-kind support are free food or housing that a family receives, usually in exchange for work or services. You usually don't report such support.

However, the application does require you to report the value of housing a family receives as compensation for a job on Worksheet B. The most common example is free housing or a housing allowance provided to military personnel or members of the clergy, which is required to be reported on Worksheet B.

 

http://studentaid.ed.gov/students/publications/completing_fafsa/2008_2009/faq.html

 

Customer: replied 3 years ago.
I read that web page, too. I still want to know why the orignial form says to report the housing allowance but then goes on to say do not report a basic housing allowance. Why would it say that? And why would a college financial aid advisor say not to list it? I will try to meet with that advisor again, but i really do want to understand the discrepancy - - what looks like a contradiction in the instructions. What are the guidelines and parameters surrounding a "basic housing allowance" and why it should not be counted? I have read the instructions, aI have read the FAFSA help forms, and I have gone on forums for military families. Many say do not list it, and some say to list it. I want to abide by the law, and I do not want to lose out on financial aid, so you can see why it is important for me to get a handle on why a "basic housing allowance" should not be listed, even though it says to list it in the sentence before. I don't want a rehash of the instructions, I want to know the intent of the wording about not counting a basic housing allowance. If you can dig in and get me that information, great. If not, perhaps you can direct me to someone who can. Thank you very much.
Expert:  MequonCPA replied 3 years ago.

Basic housing is "subsistence level" housing.

 

Below is a link to an interesting discussion on the topic.

 

http://paycheck-chronicles.military.com/2010/03/08/i-have-fafsa-answers/

 

It references the detailed instructions to complete the FAFSA form. See page 64 instructions for Box 92 g.

 

http://studentaid.ed.gov/students/attachments/siteresources/2011-12CTF.pdf

 

Customer: replied 3 years ago.
Interesting discussion, but still clear as mud. why list some housing allowance and not other? How does this apply to me? Do I not count basic housing? If so, how much of the total housing allowance? Even in the discussions, it seems to be saying tow different things.
Expert:  MequonCPA replied 3 years ago.

I understand your confusion, and can only interpret what I've read.

 

Much as you would like to exclude your parsonage allowance, unless it were "meager" in amount intended to only cover a "roof and a cot", the parsonage will be included as additional income. There is no partial exclusion provided for to exclude that "base" amount. Not gospel, but my understanding.

 

 

MequonCPA, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 2324
Experience: CPA, Over 30 yrs experience w/individuals and small businesses. Masters in Tax.
MequonCPA and 7 other Tax Specialists are ready to help you
Customer: replied 3 years ago.

Thanks. I appreciate your help and your sense of humor ("not gospel")

Expert:  MequonCPA replied 3 years ago.

I try, and thank you.

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