No, the income is not reported in box 12 of your W-2.
How expense reimbursement is treated depends on whether your employer has an an accountable plan, or a non-accountable plan.
with an accountable plan, you are required to prove your expenses, and your employer is required to ensure that the expenses have a business purpose. This might be through a mileage diary, or a record book that lists the date in business purposes, and mileage of each trip, or you might have an app, or there might be some other way of recording the expenses. You are only reimbursed for expenses that you can prove our work related. Your employer may issue in advance or stipend, but the employer must periodically reconcile the stipend against your actual expenses and if you were over paid, you must pay back any overage.
if the expenses were reimbursed under an accountable plan, the reimbursements are completely non-taxable. They should not have been reported on your W-2 or on a 1099, there should’ve been no paperwork at all. Because you received a 1099, you can follow the procedure recommended by the expert to report the 1099, and then zero out the income with a negative entry.
however, if the employer used a non-accountable plan, which means that you were paid for your expenses, but you did not have to prove them and the employer did not require any records, then the reimbursements are considered part of your taxable wages, and they must be reported on your W-2, and are subject to federal, state, Social Security, Medicare, tax withholding.
in TurboTax, when you enter the 1099 NEC, there is a checkbox for “this was wages from my employer and should have been included on my W-2.“ turboTax will help you fill out a form 8919 to pay the employee half of Social Security and Medicare tax instead of paying double through self-employment tax.
your employer may be subject to an investigation for failing to withhold the correct tax. For that reason, it would be courteous to ask your employer for a corrected W-2 first, if they used a non-accountable plan.
