Carl
Level 15

Get your taxes done using TurboTax

The IRS considers it business income. The employer should have included it in your W-2 and when the IRS catches it (they will) the employer will be fined. Meanwhile,there is a way to avoid that DEPENDING on what box the income is reported in, on the 1099-MISC. Can you confirm that it is in fact, box 3 please? Then I can walk you through it.