There's a slightly different way to handle a "manufacturer's incentive". And, you are correct, it is not subject to self employment tax.
SPIFF (Special Performance Incentives for Field Force) payments reported on Form 1099MISC; (1) are not treated as wages, (2) are not subject to federal income tax withholding, social security, Medicare, or federal unemployment tax, and (3) are not considered to be self employment income and, therefore, are not subject to self employment tax. <a rel="nofollow" target="_blank" href="http://www.irs.gov/pub/irs-pdf/p3204.pdf">http://www.irs.gov/pub/irs-pdf/p3204.pdf</a>
In TurboTax, Enter at:
- Federal Taxes tab
- Wages & Income
Scroll down to
-1099-Misc and Other common Income
- Income From 1099-Misc
On the follow up screen, enter SPIFF (or Manufacturer's incentive payment) in the blank box, then on the next screen, on the drop down list, check “This was a Manufacturer's incentive payment”
This will put it on line 8 of schedule 1 (2019) or line 21 of Schedule 1 (2018) (line 21 of form 1040 prior to 2018).
Describing the income as manufacturer's incentive ion line 21, of form 1040, will also reduce the chance of an IRS inquiry.
