The payment should not be treated as business income. It's "other income." Here's how to enter a 1099-MISC with income in box 3 in TurboTax so that it is reported as "other income" on Schedule 1 line 8 with the description "Other Income from box 3 of 1099-Misc."
- Enter "1099-misc" (without the quotes) in the Search box. Then click the link that says "Jump to 1099-misc."
- The first screen asks "Did you get a 1099-MISC?" Click Yes.
- On the next screen enter the information from the 1099-MISC form, then click Continue.
TurboTax will now ask a series of questions about the 1099-MISC income. Answer as follows, even if some of the answers aren't true.
- "Describe the reason for this 1099-MISC." - It doesn't matter what you enter. Enter a short description such as "Medical payment." Click Continue. You will see this description used in some of the subsequent questions, but it will not appear on your tax return.
- "Does one of these uncommon situations apply?" - Select the last choice, "None of these apply," and click Continue.
- "Did the Medical payment involve work that's like your main job?" - Select No and click Continue.
- "How often did you get income for Medical payment?" - "I got it in 2019" will already be checked. Don't check any of the other boxes. Just click Continue.
- "Did the Medical payment involve an intent to earn money?" - Select No and click Continue.
