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Deductions & credits
Code 56 is listed in Appendix B. under 1099-MISC income as a residual.
I interpret that to mean that you are not receiving this money as regular income you were trying to earn so it is not subject to self-employment tax.
Enter your form like this:
- Open or continue your return.
- Select Search, enter 1099-misc and select Jump to 1099-misc.
- Or go to Wages & Income and select Start next to Form 1099-MISC under Other Common Income.
- Answer Yes to Did you get a 1099-MISC?
- If you already entered a 1099-MISC, on the 1099-MISC Summary screen select Add Another 1099-MISC.
- Enter the info from your form into the corresponding boxes.
- The code 56 would be Box 3 - Other Income
If the 1099-MISC is not a business, you have to mark:
- no intent to earn money
- mark that the income is only for this tax year, 2023 . Otherwise the program will think it is recurring income and a business.
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February 8, 2024
4:59 PM