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Get your taxes done using TurboTax
I would be on the phone telling them to send a corrected form with a zero on it. They gave you a form saying that it is income. Here is what the IRS says about 1099 income:
At least $600 in:
- Rents.
- Services performed by someone who is not your employee.
- Prizes and awards.
- Other income payments.
- Medical and health care payments.
- Crop insurance proceeds.
- Cash payments for fish (or other aquatic life) you purchase from anyone engaged in the trade or business of catching fish.
- Generally, the cash paid from a notional principal contract to an individual, partnership, or estate.
- Payments to an attorney.
- Any fishing boat proceeds.
You are certainly not a contractor, this was not a bonus or a prize. They might be trying to say it is "other income payment".
There is a lawsuit that was similar to your situation. The guy had emails proving he asked for a corrected 1099-MISC and the IRS did allow the deduction.
If you can NOT get a corrected form, enter the 1099-MISC as income and then adjust your income as a negative amount of the same under "other income" and label it as erroneous receipt of 1099-MISC. Keep proof that you asked for a correction and records of the whole situation.
Enter the 1099-MISC:
- Income and Expenses
- Other Common Income
- Form 1099-MISC, start
- screen Who paid you
- enter the 1099-MISC information
- Describe the reason
- warranty reimbursement
- continue
- Screen Does one of these uncommon situations apply?
- Select None of these apply
- continue
- Screen Did the 1099 involve work that's like the main job?
- Select No
- continue
- screen How often did he get income?
- Select got it in 2019
- continue
- screen Did it involve an intent to earn money?
- Select No
- continue
Take it back out again:
- Go to Income and Expenses
- Scroll down to Less Common Income
- May need to select Show More
- Select bottom, Miscellaneous Income and Start
- Select bottom, Other reportable income and Start
- Screen, Any Other Taxable Income?
- Select Yes
- Screen Other Taxable Income
- Enter Description, erroneous 1099-misc from warranty
- Next to your name, enter a negative sign and the amount on your 1099-MISC.
- Continue
Good luck!
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