With your return open, search for 1099-MISC and select the Jump to link in the search results.
When you enter your 1099-MISC, enter the income in Box 2 (royalties). On the following screen, choose the source of your royalty income:
Investment income from property you own – This includes natural resources extracted from your property by a third party who leases your property, as well as royalties from intellectual property that you didn't create yourself. This gets reported on Schedule E.
Royalty income from your business, including artist royalties or operating a natural resources business – This includes income from natural resources that you extract from your property as well as royalty payments from intellectual property you created as an inventor, writer, artist, and so forth. This gets reported on Schedule C.
Once you've selected the proper classification, follow the onscreen instructions.