Yes, you have to declare it on your federal and state income tax returns, as a business per IRS rules.
Use Schedule C (Form 1040) to report income or loss from a business you operated or a profession you practiced as a sole proprietor. An activity qualifies as a business if:
- Your primary purpose for engaging in the activity is for income or profit.
- You are involved in the activity with continuity and regularity.
Please see Where do I enter Schedule C?
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