If this is their warranty, then yes, it is taxable. If there was no reporting form, enter it as other income.
Federal law states that if your tax liability is paid by someone else, the amount of that payment becomes taxable income to you. Therefore, you will need to include your Peace of Mind payment on your tax return next year.
- Sign in to TurboTax Online, click Continue your return, then pick up where I left off (if you are using TurboTax CD/ Download, then just open your return on your computer).
- Click on Federal Taxes at the top of the screen.
- At the bottom of Your Income box pick the option in blue to help me add other income, then jump to full list;
- Scroll down the page to the last section titled: Less common Income and click show more;
- Select start or update next to the last topic titled Miscellaneous Income, 1099-A, 1099-C;
- Scroll down to the last option titled Other reportable income and select start or edit;
- When it asks, "Any other reportable income?" say yes then type in a description and the amount to report it on your tax return.
This will place it on line 21 of your Form 1040