Schedule C Line 1F W2 Statutory income cannot be reported on the same form as other business income is appearing. The only business income on this Schedule C is the Statutory employee income. The error prevents me from filing the return.
Do you have a Box 13 Statutory Employee checked when you entered the W-2?
If it is checked on your physical W-2, then see the information below. If you accidentally checked it when entering the information, go back to uncheck it. If the trouble continues, delete the W-2 and then re-enter it.
Statutory employees are a very special designation and have their own special rules. If you are a statutory employee, you can claim certain business-related expenses on Schedule C instead of Schedule A. This means you get a bigger tax deduction than traditional employees.
Statutory employees are considered both independent contractors and regular employees. Most people are regular employees - they work for an employer and the employer says what job will be done and how to do it.
Statutory employees have been declared employees under federal tax laws, but are independent contractors under common law. These workers are usually working salespeople or have commission based employment.
The information from the W-2 has to link with your Schedule C
For 2020, 1 have 1 W2 and 2 1099-NEC that I have entered on TurboTax. I can't move past review as it gives me this error message:
Line 1f: W2 Statutory cannot be reported on the same Schedule C as other business income. Either remove any amount entered for statutory employee income or unlink the W-2 worksheet from this copy of Schedule C and link it to a different Schedule C.
I deleted the W-2 and manually re-input, still getting error message, Please advise
Did you find a resolution or a work around to this? I am having the exact same issue, statutory employee W-2 and a couple of 1099-NECs
You must have 2 Sch C forms ... one for the statutory W-2 box 13 expenses and another for the 1099-NEC income ... they must be on separate forms.
It looks like part of my message wasn't showing. There wasn't a W-2 entry made on this return. So I don't understand how it could have been populated to begin with. I saw that it said to delete the Schedule C and start over. I don't know how to do that either. But I will go try that. Didn't find this very helpful.
I have the same problem. Most of the answers here assume that the W2 has Statutory Employee correctly CHECKED. I have a W2 that (correctly) does not have Statutory Employee checked but this W2 is somehow linked to my side business (1099-NEC, Schedule C).
I have deleted the W2 and reloaded it, but the Schedule C Statutory Employee check box remains checked with the same error message.
Please address this use case.
It would be helpful to have a TurboTax ".tax2021" file that is experiencing this issue.
You can send us a “diagnostic” file that has your “numbers” but not your personal information. If you would like to do this, here are the instructions:
Go to the black panel on the left side of your program and select Tax Tools.
We will then be able to see exactly what you are seeing and we can determine what exactly is going on in your return and provide you with a resolution.
I had a 1099-NEC on my Schedule C along with other non-W-2 income, and I can't get past it insisting that I am a statutory employee. I moved the 1099-NEC off the Schedule C, but I still can't move forward. Please Help.
I documented on this link what worked for me ...
I have this issue and can't figure it out. Here is my token number 966784. Please help. Thanks!
You need to progress through the W-2 entry again. At the end, it asks to identify the type of work is involved for the Statutory Employee W-2 and to assign it to the correct Schedule C.
To get back to your W-2 entry you can use the magnifying glass icon to search W-2 and then click Edit or Update for your W-2. Progress through the interview and the system will prompt you for the questions.
@kimelton
I'm not sure what you mean by "assign to the CORRECT schedule C". I believe I am assigning it to the right one. Every time I add self employment income and expenses, it's all going to the same tab. Is my statutory W-2 schedule C supposed to be separate from my other self-employment schedule C? If so, How do I do that?
Thank you for your help and patience. I never had this issue last year and did the same kind of filing.
Is the statutory income related to your "other" self-employment business? If not you need to add another Schedule C business for this income. Under the list of businesses under Business Income & Expenses, click the button for Add a Business.
I work in insurance and I have a W-2 statutory income from Insurance Company A, but I also get a 1099 from Insurance Company B, C, D. All the expenses are all related.
I used the intuit self-employed app to track all my expenses and mileage. Which I linked my W-2 statutory income to that (since that's my largest income).
I create a new expenses/business income&expenses for Company B, C, & D. I didn't deduct any expenses on these since I already deducted them on Insurance Company A with the W-2 Statutory.
I hope this makes sense.
I'm still getting the same error message "w2 statutory cannot be reported on the same schedule c as other business income" when I put all the income on one Schedule C or when I separate them. Not sure what I'm doing wrong.
The w2 is marked statutory, the expenses and additional income go to sch C that relate to that business. The w2 creates the sch C. One idea is to file a correct sch C with income and expenses and return to the w2 and uncheck the box that says statutory. The IRS also received your w2, the sch C is there. This is the easiest solution.
What if your statutory income your 1099 NEC income are all for the same business and have the same expenses. Can you put them all on one Schedule C with the expenses or do you have to have 2 separate Schedule C's one for W-2 statutory income and one for 1099 NEC income?
If two separate Schedule Cs are required do you just put all the expenses on one of them?
If you have both a statutory W-2 and a 1099-NEC for the same business you will post both to the same Schedule C, and only enter the expenses once.
I posted this in the Self-employed Online software and had no problem.
This error reminds me of "One Flew Over the Cuckoo's Nest", when they were playing monopoly.
The W-2 was imported with Statutory Employee checked.
I selected "yes", as to Expenses needed to be entered for this business.
I did not add or create a 1099 to this Schedule C.
All checks passed and I was on to filing electronically. TT took all my account information, etc.
But then it was wait, let's check the return again. Oops, you've added a 1099 to your Schedule C.
And yet, I had not done so.
The TurboTax program had no other suggestions on how to fix this "error"
Thanks for the link. But it appears you are solving a different problem.
My W-2 has the statutory box correctly checked.
The error I'm having is that the Sched C can't also have a 1099 attached. Mine doesn't, so I don't know what it's complaining about. (Some bug under the covers is my guess).
Here's how I was able to move forward.
Scenario - 4 separate Schedule C's as follows:
1) Income on W-2 Statutory from on Insurance carrier, box checked for statutory. Expenses are logged here.
2) 1099 income from a 2nd carrier. A small amount of income, no expenses.
3) 1099 income from a 3rd carrier. A small amount of income, no expenses.
4) 1099 misc - referral fee. A small amount of income, no expenses.
Only income from 1) could offset the expenses incurred.
All checks passed fine.
Upon electronic filing, entering payment information, etc, the program balked and went to check something, the 1st Schedule C. It complained you can't attach any 1099's to that schedule with Statutory income.
But I hadn't.
FIX: in this order.
1) Decouple the W-2 from the schedule C.
2) Delete the schedule C (keep a printout to re-enter data)
3) Create a new schedule C.
4) Associate W-2.
5) Add expenses.
I think adding expenses before linking the W-2 was the glitch.
Is there a new work around for the current year, my customer has two schedule C one for NEC income and the other for the Statutory income but still receiving same error message.
I just linked the W2 Statutory income to the Sch C. It worked fine for me. See here.
Need to delete the W2 and re-enter it because I did not see that message. Thank you for the share it was much needed. @AbrahamT