AmyC
Expert Alumni

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:

  1. Open or continue your return.
  2. 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.
  3. 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.
  4. 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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