1099-NEC Non employee compensation

Forum|Forum|3 years ago
January 18, 2023
2 replies
36 views

I am a retired employee of a Bank that purchased a split dollar life insurance policy on me when I was employed. I have been receiving 1099-misc forms in previous years and a 1099-NEC last year and this year for a calculated amount that is supposed to be the economic benefit to me. This year Turbo Tax is wanting me to complete a schedule C. This is new this year. I do not have a business, this is not business income but apparently it is taxable compensation because I am a former employee. What should I do?

popsjohnAuthor

Level 2

I did some more playing around with the software and selected under uncommon situations: This is not money earned as an employee or self-employed individual, it is from sporadic activity or hobby. This worked and didn't require a schedule C.

DianeW777

Level 15

You are correct, this is not self employment income, and should be reported on Form 1099-MISC. However, for you it is easily reported without using Schedule C, which would be incorrect.

This income sounds like group term life insurance benefits that exceed $50,000. For this reason you are receiving the reporting form. Since you are retired, they can no longer add this to your wages.

To report this income you can use the following steps.

Go to the Wages and Income section of TurboTax

Scroll to Less Common Income > Select Miscellaneous Income, 1099-A, 1099-C
Select Other reportable Income > Enter a description (GTL Retired) and the amount