This is correct. A couple of things:
1. First Responders who received the bonus got 1099-NEC that originally displayed a bonus paid of $1,338.77 and a Federal Income withheld of the same amount. A CORRECTED 1099-NEC was sent out where the Federal Income withheld was changed to $0. There was even a statement on the CORRECTED form that stated the first 1099-NEC was wrong.
2. The state included $338.77 in the check to cover Federal taxes so the check would be a true $1,000 bonus.
3. The steps on how to report this income (1099-NEC) have been covered/copied and pasted several times in the thread and does work. Following these steps keep it from having to be reported as a business.
4. I wish more guidance would have been given while completing the taxes themselves, but glad we have forums that people were able to provide the guidance.
