My 17 year old earned around 4000 last year on youtube. The AdSense account is under my name and social because you have to be 18 so the 1099 will be assigned to me. How do I transfer the income to him so he can claim it on his own return. I've seen many post saying that since its under my SSN it is my income, but in tax pub 929, tax rules for children it says,
"Child's earnings.
For federal income tax purposes, amounts a child earns by performing services are included in the gross income of the child and not the gross income of the parent. This is true even if, under state law, the parent has the right to the earnings and may actually have received them."
So there must be a way. Can anyone help?
The 1099-NEC is reported under your social security number to you and the IRS so the IRS will be looking to reconcile that income on your return. You will therefore need to report it and then subtract it out as "dependent child income under Publication 929."
Since the amount is over $400 your son will need to file a return and claim the income and pay the taxes including self-employment taxes on the income.
First on you return enter the 1099-NEC under the "Wages & Income" tab, the "Other Common Income" topic. Enter the form info and for the description use "Dependent Child AdSense income." On the follow on page check "This is not income earned as an employee self-employed." Finish the topic interview and then go back to the "Wages & Income" tab.
The 1099-NEC will then be entered as self-employment income on your son's tax return in the "Wages & Income" tab.
The 1099-NEC is reported under your social security number to you and the IRS so the IRS will be looking to reconcile that income on your return. You will therefore need to report it and then subtract it out as "dependent child income under Publication 929."
Since the amount is over $400 your son will need to file a return and claim the income and pay the taxes including self-employment taxes on the income.
First on you return enter the 1099-NEC under the "Wages & Income" tab, the "Other Common Income" topic. Enter the form info and for the description use "Dependent Child AdSense income." On the follow on page check "This is not income earned as an employee self-employed." Finish the topic interview and then go back to the "Wages & Income" tab.
The 1099-NEC will then be entered as self-employment income on your son's tax return in the "Wages & Income" tab.
My child's youtube income is not reporte in 1099-NEC but in 1099-MISC. There is no place for a 1099-MISX in turbotax to check "This is not income earned as an employee self employed". The only options are Investment income from property you own, or royalty income from your business, and in this case it takes you to the self employed section. How should we report it?
@lauactuary wrote:
My child's youtube income is not reporte in 1099-NEC but in 1099-MISC. There is no place for a 1099-MISX in turbotax to check "This is not income earned as an employee self employed". The only options are Investment income from property you own, or royalty income from your business, and in this case it takes you to the self employed section. How should we report it?
After completing entry of the Form 1099-MISC, on the following screen Does one of these uncommon situations apply? Check the box None of these apply. On the next screen click on No, it did not involve work like (name's) main job. Then just follow the interview and select the option it did not involve an intent to earn money (if that is true) and complete the interview.
When I input the 1099-MISC income into TurboTax, the only question it asks is whether the royalty income is from a natural interest or from being self-employed. There are no other questions asked or options.
I can't get past Step 4 on this. It doesn't give me an option to "Enter "Child Income Pub 929""
After you have entered the amount in box 3 into the 1099-MISC form on TurboTax you click 'continue' and the very next screen says 'Describe the Reason for this 1099-MISC'. Here is where you will enter 'Child Income Pub 929'. Then finish the entry so that it shows the income as income to you.
Then, as detailed above, follow these steps to enter the income as a negative in order to remove it from your return.
go back to the "Wages & Income" tab.
Also as stated above your child will need to enter the amount received on the 1099-MISC as income on their return provided it is greater than $400.
Did you ever figure out how to file the 1099 MISC for your child's YouTube royalties? I am facing the same issue now. I saw a video saying that I had to order a 1099 MISC form from the IRS and had to file it by Jan 31 (It's already Jan 29 so that is not going to happen on time). They said in the video that you need to file the 1099 MISC to your child for the income earned under your name as a Parent Nominee (as if you are paying it out to them) and then you need to file a return under your childs name for income they earned as self employment (royalities). My son's earnings were approx $350 or so and then he turned 18 that year and switched his AdSense account over to his own name. I wouldn't mind just paying the taxes on the $350 myself since I read the penalty for filing the 1099 MISC late can be $60+ and then I would have him just file a return for the money earned under his name. Any additional info? I wish I had known this earlier! Step 4 does not allow me to proceed when trying to enter the 1099 MISC in Turbotax.
Do you have a link for the video? I'd like to see it.
I was having the same problem with TurboTax when entering the 1099-MISC. The program ends up in a loop where you can't get past that step. For now, I took it out of the the 1099-MISC section and instead listed the income amount as both a positive and negative in Miscellaneous Income - Other Reportable income. For the positive entry I wrote "Dependent Child's YouTube Income reported on 1099-MISC issued to parent". For the negative entry I wrote "Dependent Child's YouTube Income moved to be reported on Dependent's return". I'm still researching whether this would be an allowed way of reporting it, though.
The correct way is to indeed file a 1099-MISC from you to your child and there is a Jan 31 deadline. You can file the form here. You can log in with your TurboTax user name and password.
You could enter the form on your return and mark it as nominee income to subtract it back out but that is not the correct method.
The final option is to report the income as your own.
Thanks for the info. The link from AmyC to file online using TurboTax username/pw was saying that I would need to pay $189 for access, so I'm going to do the paper forms. It looks like 1/31 is the deadline to give the 1099-MISC to the child and 2/28 the deadline to file with the IRS so I'm assuming that it's okay to request the paper copies of the 1099-MISC and 1096 from the IRS now (should take about 2 weeks to arrive) and then submit them to the IRS by 2/28. This is the YouTube video that I found https://youtu.be/xgo7QJV8wVM?si=T_2u9Hq-rJ4McHXm. This is the website to request paper forms https://www.irs.gov/forms-pubs/forms-and-publications-by-us-mail.
You don't have to pay the $189. You can prepare and efile the 1099Misc and 1096 from the Online Premium version or the Desktop Home & Business program. Or here are the IRS forms so you don't have to wait for them in the mail
1096 Transmittal
https://www.irs.gov/pub/irs-pdf/f1096.pdf
1099Misc
@VolvoGirl Thanks for the reply.
The forms say that you can't file the printed version, it has to be the scannable one from the IRS. I also don't have the Online Premium version or the Desktop Home and Business. I just have the desktop Premier which leaves the scannable paper forms from the IRS as the only option.
I'm confused. If the correct way to file is to send your child a 1099 misc. How is it rectified on the parents return if not to subtract it on a Sch C?
If the income is reported on the parent's tax return as Schedule C income, the income should be subtracted out as a miscellaneous expense.
By doing this, the income is acknowledged on the tax return of the person whose Social Security number is on the 1099-MISC.
If a subsequent 1099-MISC is issued to the child, the income is correctly reported on the child's tax return.
The $189 that they are referring to is the cost of the online TurboTax Premium upgrade. I'm guessing that you have to enter the 1099 MISC as 'royalties' under "Rentals, Royalties, and Farms" section of Turbotax. When I go to that section to enter that info it tells me that I will have to upgrade to the Premium version instead of using TurboTax Deluxe. (online) I am curious about the 1099 MISC since I read online that the copy you have to file with the IRS needs to be the printed one that you have to order through the mail because it is 'scannable' for the IRS (top page is printed in a red/black ink with carbon copies underneath for your child). Is there no way to file this online? I'm wondering if I am going to have to print out my return and mail it in? I have always done E-file so this is new to me.
No, you should be able to efile. You would only send in a copy of the 1099 MISC if you decide to print and mail your return. If you decide to efile, then it doesn't need to be sent in.
Hello DMarkM1! Does this still work for the 2023 tax return? Also, is it ok to use this even if I have a 1099-MISC? I will file a separate tax return for my child ( sched c). I tried doing the 1099-Misc route but after adding the negative amount turbotax won't remove the self-employed tax. Your method 1099-Nec doesn't add a self-employed tax as it have the the check button option "This is not money earned as employee or self-employed individual, it is from sporadic activity or hobby (this is not common) . Thank you in advance!
For Form 1099-MISC, report this as "Other Income" on your tax return.
Those three answers should classify this as "Other Income", which will appear on Line 8 on Form 1040.
To offset this income, make another 1099-MISC entry with a negative value in Box 3 (equal to the income amount). The two entries will net to zero on Form 1040 Line 8.
Hi @PatriciaV ! Thank you for your reply! I didn't put in box 3 until now. That works. Thank you! Appreciate the assistance.