Where do I enter income received on 1099-NEC on form 1065 for Partnership LLC?

[MrsGrizz]

My Partnership LLC received several 1099-NEC forms reporting compensation for this Partnership LLC. I am filing form 1065 for the LLC. Where do I report this 1099-NEC income? Is it reported as "Other Income"? Thanks in advance.

[MaryK4]

You would enter the 1099-NEC as Sales of Product or Service Receipts if it is for services rendered.   Other business income includes discounts earned, refunds of insurance premiums, or rebates. 

If payment for services you provided is listed on Form 1099-NEC, you are being treated as a self-employed worker or independent contractor. Please verify that this is NOT included in the gross receipts total. If it is, this information is already included in your gross receipts total.

[MrsGrizz]

Thanks for your reply.  On IRS Form 1065 I don't see a separate line "Sales of Product or Service Receipts" that you suggested. On Form 1065, line 1a is "Gross receipts or sales." Is that where I enter the 1099-NEC - along with all other income? I understand I would not "double count" the NEC income if it is all included on 1a "Gross receipts or sales".  Thanks again.

[DianeW777]

Yes, enter the amount shown on your Form 1099-NEC along with all other income from the partnership business. That is where it should be included on the tax return.

[B Cat]

Hello. I am still confused. Does the information for 1099-NEC for a partnership LLC go in line 1a Gross receipts and sales? Also, could you please tell me if I send the 1099-NEC form together with form 1065? Thank you.

[PatriciaV]

Yes, the income reported on Form 1099-NEC should be recorded under Gross receipts and sales for the Partnership, as long as the income belongs to the partnership and the EIN is correct.

You don't need to send a copy of the 1099 with your tax return. The information you enter is sufficient.

@B Cat 

[B Cat]

Thank you for your very helpful and quick response!

[Jesseniar11]

What if the 1099 is issues to a Partner's social in the partnership but the the income is for the partnership?

[ThomasM125]

I think you mean one of the partners received a form 1099-NEC and their social security number appears on the top of it. The best thing to do would be to request the issuer of the form to correct it and replace the social security number with the partnership ID number. If that is not possible, the partner could just ignore the form, but then he or she may get a notice down the road from the IRS assessing tax based on the income reported. If so, the partner could explain what happened and that would settle the issue. Another option woud be for the partner to report the income as "Other Income" on his or her tax return, and enter a negative adjustment to income to cancel it out. If you choose this option, when you enter the 1099-NEC, indicate that it is from a temporary job not related to the partner's work so it will show as other income as opposed to self-employment income.

Here is how you make a negative entry to Other Income:

1. Choose the Federal option on your left menu bar
2. Choose Wages & Income
3. Find Less Common Income in the list of income sources
4. Use the Show More option to expand the choices and choose Miscellaneous Income, 1099-A, 1099-C
5. Choose the Other Reportable Income option and find Other Taxable Income in that section
6. Enter a description for your adjustment and the amount as a negative number