Your cousin should file a return even if they don’t owe due to making less than standard deduction. Any taxes they paid during the year they’ll receive back as a refund. Also, they won’t have SS and Medicare tax on the incentive at least my husband didn’t. You wild report the $4,000 on NEC form and then report a -$600 on another line with VIRPA in the description so the net reported is $3,400. If you can’t get the negative to accept, report the net only for the 1099NEC form and reference VIRPA in the description l.
