It sounds like they treated the recipient as an independent contractor. Please click here to learn how the IRS differentiates between independent contractors and employees.
If, after reviewing the three categories of evidence in the above link, it is still unclear whether a worker is an employee or an independent contractor, Form SS-8 can be filed with the IRS. The form may be filed by either the business or the worker. The IRS will review the facts and circumstances and officially determine the worker’s status.
Be aware that it can take at least six months to get a determination.
Although it may be news to you that you “have a business” (and most of the other people who get their first 1099-MISC); The IRS considers anything in box 7 of 1099-MISC to be self employment income. Enter the 1099-Misc income, at Other Common income / income from a 1099-MISC . TurboTax (TT) will complete Schedule C or C-EZ for you and allow you to deduct any expenses associated with this income. You'll also have to pay self employment tax (social security & Medicare) on any profits greater than $400. These types of payments are frequently done this way. Your "employer" is not the only one.
As the other reply indicates, there is a way to contest the contract employee classification. But, it's a big hassle, you still the employee half of the FICA tax and you risk upsetting your employer. Just file the Schedule C.
You may have to upgrade to the Self Employment version of TT. If you have no expenses to deduct, there's a chance you may be able to use TT Deluxe or Premier. Enter your income at the 1099-Misc screen
But, there may be third alternative. Depending on what you did to earn this money, you may qualify for the one time gig exception to self employment tax.
The IRS considers anything in box 7 of 1099-MISC to be self employment income. TurboTax (TT) aggressively steers you in that direction, even if the amount is in box 3. If you try reporting box 7 income as anything else, you chances of hearing from the IRS are very high.
That said, the key to getting TT to treat it as other income is to follow these steps:
Enter the 1099-Misc
On the next screen Describe what the payment was for
On the next screen select "none of these apply"
On the next screen select "No it didn't involve work like my main job"
On the next screen select "I got it in 2019" ONLY
On the next screen select No, it didn't involve intent to earn money
TT will put the amount on line 8 of schedule 1 as other income
See http://www.journalofaccountancy.com/Issues/2009/Jul/20091639.htm