2 different things going on. Regular Income Tax and Self Employment Tax.
The 1099NEC is for self employment income. You fill out schedule C for it. Then the Net Profit or Loss goes to the 1040 Line 8 as Other Income. The income is being included with your W2s. The Profit on Schedule C is counted as Earned Income for the Dependent Standard Deduction. The amount that counts towards Earned Income is the Net Profit (minus 1/2 the SE tax)
Then the Standard Deduction is subtracted from ALL your income. If your Taxable Income is 0 there is no REGULAR Income Tax on your total income.
But you will still owe the Self Employment Tax on it. Self Employment tax (Scheduled SE) is automatically generated if a person has $400 or more of net profit from self-employment. You pay 15.3% SE tax on 92.35% of your Net Profit greater than $400. The 15.3% self employed SE Tax is to pay both the employer part and employee part of Social Security and Medicare. So you get social security credit for it when you retire.
