Following those prompts worked for me last year for 1099misc for short-term disability payments (obviously not a business, right?), but this year it did not ask me if it was an attempt to make money. It seems to be an error or oversight in the software. I am not a tax expert, but here is what worked for me on the desktop version:
Click on Forms at the top
find Schedule 1
I compared my form from last year to the one from this year and saw that I needed to move $ from the 1099misc from line 3 (business income) to line 8z (other income) but the field could not be edited. It turns out you have to enter it on the worksheet and it will automatically populate the schedule 1.
find the form called "Other Income"
Go down to line 12 and enter "other income from box 3 of 1099misc and your dollar amount. It was entered on line 8z last year, but I am unable to edit those fields in forms. This puts the info on line 8z (other income) of the schedule 1, where I think it is supposed to be, for me anyway.
Go to step-by-step and find business income, schedule C
Delete the schedule C
This will take the $ out of line 3 (the business income line) on the schedule 1, but the 1099misc still shows an error because it wants to create the schedule C.
Go back to Forms mode and find your 1099misc form
I checked "other income" in box 3 of of 1099misc and the error went away.
Problem solved... hopefully
