Patent Royalty from an University and Self-employment Tax

[jhson78]

Hi,

I have a small amount of royalty from the university I worked at before and should I pay self-employment tax as I received the 1099 NEC this year?

Appreciate your help!

[Carl]

Royalty income is passive income and not subject to the self-employment tax. Additionally, it's reported in box 2 of IRS Form 1099-MISC, not 1099-NEC.

If taxes are not withheld from that royalty payment, then you should consider making quarterly payments of at least 20% of the gross income received each quarter. If your state also taxes personal income then you'll need to make quarterly payments to the state also. State quarterly payments should be equal to whatever tax rate the state taxes you at. Presently to the best of my knowledge, the highest state tax rate I'm aware of is 8.25%.

[jhson78]

Appreciate your help!