Who gave her the 1099-MISC, her employer or an outside firm? Per IRS instructions for Form 1099-MISC, enter in box 3 prizes and awards that are not for services performed.
A non-work 1099-MISC would be for things like:
- Prize money
- Lawsuit settlements
- Research studies
- Other
Here's an example of incentive pay: Basically, Box 3 reports any income you receive from an endeavor that you didn’t engage in for profit, and that’s admittedly a gray area.
- Automotive salespersons certainly work to earn a living, but they work for and are under the control of the dealership, not the manufacturer directly, and therein lies the loophole.
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