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On the back of your 1099-MISC you are instructed where to report this income, which does not indicate it would be tax free on your New Jersey (NJ) return. If necessary you should check further with the payer of the income to determine if any of it should be tax free.
- Box 8. Shows substitute payments in lieu of dividends or tax-exempt interest received by your broker on your behalf as a result of a loan of your securities. Report on the 'Other income' line of Schedule 1 (Form 1040). You can use the instructions below to enter the income.
If it is dividends, then it may be added to the cost basis of the security which will reduce gain or increase loss at the time of redemption. This may be why it's taxable income now.
Other Miscellaneous Income:
- Sign into your TurboTax Online account
- Go to Tax Home (left panel) Wages and Income section
- Scroll to Less Common Income > Select Miscellaneous Income, 1099-A, 1099-C
- Select Other reportable Income > Enter a description (----) and the amount
