1099-Misc Retirement Benefits

[Anonymous]

I have been retired for 4 years and will be receiving a 1099-Misc for my previous employer paid portion of my domestic partner's medical insurance benefit premiums. Last year it was $12228 for their portion of the premiums. A portion is also deducted from my pension check monthly. The $12228 is shown in box 6. This causes me to complete a Sch C. This is not my business but a retirement benefit that I have optioned. How should I show this on my return? Should I show it as "Other Income" with the appropriate explanation and ignore Sch C? The end result will not be any different. I will still pay taxes on that dollar amount for 2021. Please advise.

[ColeenD3]

1099-MISC Box 6 instructions are clear. Box 6. For individuals, report on Schedule C (Form 1040). You can ask for a corrected 1099-MISC with the amount entered in Box 7.

Normally this would be included on your Form W-2 as taxable imputed income, but since this is from your former employer, he has to submit this amount on Form 1099. 

Please see this LINK for more information.

@Anonymous

[Edited 1/31/2022|10:16 EST]

[JohnB5677 · Accepted solution]

You stated that a portion of the premiums was deducted from your pension check.  You should check to see if it was deducted from your taxable income.  If it is Box 2a should be smaller than Box1.

If this is the case, the entire $12,228 is taxable. You should not use Schedule C.  This would result in owing Self Employment taxes.

You should enter the 1099-MISC this way.

You are not self-employed, but TurboTax thinks you are because of the way you entered it on your return.

• Wages & Income

• Scroll to Other Common Income

• Did you get a 1099-MISC?  Yes

• Post information to Other Income

• Reason - Payment of Insurance Premium

• Continue through interview

• Select payment in the current year.

If you do not follow this posting procedure it will result in self-employment.  You would have to pay 15.3% in self-employment tax (Social Security & Medicare).