I'm not sure if you are being asked the test question for self-employment, or a question that would relate to improperly being treated as a contractor when you should be an employee.
Generally, you should not get a 1099-NEC and a W-2 from the same employer in the same year, they should put everything on the W-2, and they are responsible for their share of social security and medicare tax. If they separate you and then "rehire" you as a contractor, they may be trying to cheat you on taxes, benefits and other things. You may want to read this.
https://www.irs.gov/businesses/small-businesses-self-employed/independent-contractor-self-employed-o...
However, if you legitimately separated from service, and started doing contract work for them, and the working conditions changed to the point that it really is legitimate contract work and not a scam by them, then it's ok to have a 1099 and W-2 in the same year.
There are two questions you may be asked. When you enter the 1099-NEC, you are first asked a series of test questions to determine if you really were self-employed or if this was something else like a hobby. Questions like, "is this similar to your regular work", "did you intend to make a profit" and so on. If that's where you are, go ahead and answer yes, you were a contractor trying to make a profit so this is self-employment income.
There is also a box you can check on a page of special circumstances for "this was from my employer and should have been included on my W-2." This brings up a special form to recharacterize the income as employee income instead of independent contractor income. You should not check this box unless you think your company is trying to cheat you by reclassifying you as a contractor.
