Gd2
Level 2

Get your taxes done using TurboTax

The income isn’t on a W2 because the recipient is no longer a company employee. She purchased the stock at a discount relative to fair market value while an employee years ago; but the way ESPP shares are taxed, this effective compensation isn’t reported until sale of the stock, which didn’t happen until 2022 and years after leaving the company. The company sent the 1099 misc documenting this, and we did ask them if this was the correct way to report this, and were assured several times in their view it was. 

I did exactly as you described and found the other taxable line and made the entry. Earlier I had tried another trick by entering the amount in box 3 instead of box 15 of 1099 misc since turbotax recognizes box 3. When doing this I had to make one dubious claim (Income was not obtained for the purpose of profit), but it did work and both methods above gave me exactly the same refund amount for state and federal. So looks like I have two ways out of this, just need to decide if I risk getting a query from the IRS about a missing 1099, or hope they don’t catch an entry in the wrong box if I do include the 1099…

 

Thanks again everyone for the help!