You have to report the Form 1099-NEC on your tax return. You do not have to pay tax on that amount twice. The easiest way to resolve this issue is to report the Form 1099-NEC on Schedule C as self-employment income. In addition report an expense for the same amount. The two will net to $0.00 and you will not be double taxed. Enter the expense as a Miscellaneous/Other expense. Use a description something like: Payment made to employer and included in taxpayer's W-2, box 1 wages.
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