It depends on where it is entered whether it will be sorted to Other Income or to Schedule C to be subject to self-employment tax.
Keep in mind that the first $5,250 of student loan repayment is not taxed. However, for excess amounts, it must be included in your Form W-2 from the employer unless it is considered a working condition fringe benefit. Please review these rules to determine if your Form W-2 must be corrected. See: IRS Publication 970 Tax Benefits for Education, page 67, column 2.
If you qualify to proceed with Form 1099-MISC, return to the original entry and review your answers in the interview.
To do this in TurboTax, follow these steps:
- From inside your program, go to the search bar and enter 1099misc.
- Select the Jump to link in the search results.
- At 1099-MISC Summary, select the Edit pencil icon next to the employer provided 1099-MISC for your student loan reimbursement.
- Review the information and follow up questions. Student loan reimbursement is not work like your main job. Even if the payments are ongoing, that would not necessarily pertain to this Form 1099-MISC which was received solely in 2020.
For more information, see: What Is the IRS Form 1099-MISC? - TurboTax Tax Tips & Videos
