I am a tax preparer and we are seeing these now. This is taxable on your federal return but not on your CT return.
We contacted CT DRS and are being directed to input CT Hero Pay as follows.
On the federal return - this income needs to go on Federal Schedule 1, Line 8z, as Other Income. It is not business income, it is miscellaneous income*, and must not generate a Schedule C that will further generate self-employment taxes.
We note it as "1099-NEC xx-xxxxxx", where the xxx are the "PUBLIC PARTNERSHIPS LLC" EIN.
This should not be designated as "Earned Income".
On the state return - Because this is free of state income tax, the value should be added to CT Schedule 1, Line 49, "Other - Specify" so that it will be subtracted from AGI. We designate it as "CT Premium Pay" or similar.
*I get the impression CT muffed it, and should have sent as a -MISC and not -NEC. But here we are...
