Found Missing 1099-Misc

[relliott4224]

After filing my Federal tax return, I have received several notices from the IRS advising me that there was a delay in processing my return and each notice announced a 60-day delay.  M was expecting a refund of $3692.  The last notice I received was dated July 28, 2025.  About a month ago while cleaning the interior of my wife's car, I found an unopened envelope between the seats that contained a 1099-Misc from Metropolitan Life Insurance for $4238.39 for NY paid family leave which did not get included in my Federal return.  My wife is a Delta Airlines flight attendant who at the time was based in New York when she went on paid family leave due to foot surgery.  We live in Illinois and filed an Illinois state return.   do you think the delay in processing my return from the IRS in due to the omission of this 1099-Misc?  Should I wait for the IRS to process m y return before taking action on this latest find of the 1099?  Do I now have to file a state return with New York?

Separate from this issue, I completed a Roth conversion for the tax year 2024 late in the 4th quarter (last week of December) 2024 and Turbo Tax accessed a $589 penalty which I believe was in error as I paid my estimated 4th quarter tax liability for this conversion in early January 2025 prior to the due date.  I contacted Turbo Tax when I filed my Federal return and the agent agreed that the penalty should not have been accessed.   Not sure how to rectify this issue?

[vithalanin]

I would not file an amended return at this time as the IRS is still processing your original return. Filing an amended return now will delay your processing by a lot as the IRS will have to process 2 returns at the same time in different departments. When the IRS is finished processing your original return, you are more than likely going to get the CP2000 notice, which is for missing income.

I recommend you create an account with the IRS. Then go and get online your wages and income transcript for the year 2024. Keep your original return handy along with the 1099-MISC and the wage and income transcript. 
Once you hear from them, if you may consider amending your return to see if you agree with the IRS outcome of income and taxes. 
Once you receive the CP 2000 notice, you can agree and pay or disagree and not pay or partially agree with them. You will have a chance to respond to the notice they send you.

As to your question about the penalty assessed by Turbo Tax, once your return is processed and you amend your return, you can go to the penalty section and then use the annualized income screen to say that this withdrawal was made in the 4th quarter. Then the penalty will not be assessed on it as the estimated taxes will have been made timely. You should include Form 2210 with your return.

[Loretta P]

It is very likely that the missing 1099-MISC is the reason or part of the reason for the IRS delay in processing your return.  You need to wait for the IRS to either process your return or send you a notice advising you of any discrepancies they found on the return or requesting additional information.  

If the IRS processes your return, once it has been processed, you will need to file an amended return to include the 1099-MISC.  

If the IRS sends a notice requesting additional information and the situation is resolved in that manner, you would not need to amend your return.

If you did not file a NY return with your original federal/state returns, you may need to file a NY return once the IRS processes your return.

The $589 penalty was likely triggered because the tax software, by default, assumes your income—and therefore your tax liability—is spread evenly across all four quarters. A large conversion in the last week of December would create a significant tax liability for the fourth quarter. If your estimated tax payment for that quarter, paid in January 2025, covered this liability, you should not be penalized.  You would need to amend your return to use Form 2210, "Underpayment of Estimated Tax by Individuals, Estates, and Trusts."  On Form 2210 you would select the annualized income installment method which allows you to calculate your required estimated tax payments based on when you actually earned the income.  This will show a much lower income for the first three quarters of 2024 and a significant increase in the fourth quarter due to the Roth conversion.

Regarding the Roth conversion, I would wait until the original return is processed or resolved by the IRS before making any changes.  

[relliott4224]

Thanks for the response.  The only thing you didn't address is whether I need to file a New York state return for the income reported on the 1099-misc from Metropolitan Life Insurance Company NY Paid Family Leave.  Please advise.

Thanks, Richard Elliott

[Loretta P]

Sorry I wasn't clear enough, you will need to file a NY return to report the paid family leave from the 1099-MISC.  If you did not file a NY return with your original federal/state returns, you may need to file a NY return once the IRS processes your return, but I would wait until the IRS processes the original return to file for NY.