@kellykar2012 wrote:
Hello Dawn C.
The check was for NYS unclaimed money. The check states the following:
Reported Amount $573.91
(+) Taxable Interest: $139.47
Check Total: $713.38
So it appears $139.47 is taxable. I am asking what amount shown above should be added to Other Miscellaneous Income / Other Reportable Income? If I am to write $713.38 there then where do I put the Taxable Interest: $139.47?
Note: The Turbo form says: "Do not enter income reported on Form 1099-MISC." I do not have a such a form for this money which came from NYS Comptroller office. How do I report the income received and report the tax shown on the check?
The interest of $139 is taxable as bank interest, enter it in the Income section for bank interest. I believe you enter the name of the payer (NY State) and there may be a check box for "I did not get a 1099-INT".
The $573 may or may not be taxable depending on what it is from (I will explain more below). However, if you can't prove it is from a non-taxable source, then you probably should assume it is taxable. In the section for "Less Common Income", choose "Miscellaneous income", then choose "Other reportable income." Answer yes, give a brief description such as "NY recovered funds" and enter the amount.
If you can identify the source, the money may not be taxable, it depends on where it came from. (The interest earned is always taxable but the base amount may not be.)
For example, it might be a refund of excess medical insurance premiums, if you lived in NY and the NY Insurance Commission determined your insurance company overcharged its subscribers. In this case, the money is taxable if you deducted the original insurance premiums or they were paid by your employer pre-tax, but if you paid after-tax, the money is not deductible. It might be a refund of life insurance premiums if you had a small life insurance policy and the company went out of business. Since the life insurance policies were not tax deductible when you paid them, the refund is not taxable. It might be a state income tax refund, in which case the taxability would depend on if you used itemized deductions in the year you originally paid the tax that was refunded. And so on. If you can determine the source, you should be able to determine if the base recovery amount really is taxable or not. If you have no idea the source, the IRS will assume that it is taxable.
