@brimelow01 wrote:
Thanks so much for everyone that offered us a solution on this issue. It was not filed under schedule C, and it appears the employer will not reissue a W2 to add the 1099NEC, so we will send something to IRS to let them know the two were issued by the same employer of my husband. We don't mind paying taxes on what is owed, but obviously if it is reported incorrectly and employer does not pay their portion the amount would change. We will send a reply to IRS with this information.
If you reported the 1099 as "miscellaneous", other, or hobby income, then you paid the correct income tax but you still owe 7.65% social security and medicare tax. I would prepare an amended return to remove the 1099 as "other" income, and add it back as a 1099-NEC, check the box for "supposed to be on a W-2" and pay the social security and medicare tax.
(If the IRS is seeing a 1099-NEC, they are probably billing you for 15.3% self-employment tax because you did not include schedule C. You owe half of that, but you need to include the form 8919 with reason code H to document that.)
