You can enter the 1099-NEC as other income and back it out again with an explanation that it is incorrect. However, this does not mean the IRS won't contact you. It would be helpful at least to get a letter from HR saying that it was incorrect and that they don't even have a record of sending you the form.
Follow these steps and note in the explanation as much of how you were due no money, they refused to correct and that they can't even find a record of the issuance.
- From the left menu, go to Federal and select the first tab, Wages & Income
- Add more income by scrolling down to the last option, Less Common Income, and Show more
- Scroll down to the last option, Miscellaneous Income, 1099-A, 1099-C and Start
- Choose the last option, Other reportable income and Start and Yes
- Enter the applicable description and amount and Continue
- First, enter Form 1099 as received. It is essential that the full amount be entered.
- Next, enter an adjustment as a negative number to reflect the cost of these items and the sales expenses (but not more than the amount You can't produce a loss.)
