Yes, unfortunately your husband owes self-employment taxes on this income. It was an attempt to earn money and it was earned at his primary job (even though it was paid later). I think they probably should have taken taxes out of it but since they didn't your husband will have to pay the taxes now.
Using a schedule C, as TurboTax is doing, is the proper way to report this. It also gives your husband the option to deduct any expenses - if he had any - that were necessary in order to receive this commission.
@PLC3
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