After you enter the 1099-MISC on the Federal return, you will subtract it from the New York state return using Form IT-225. This form IS supported in the TurboTax programs.
According to the State of New York:
"The State has released a new form in 2014, the IT-225. This form is used to report any NewYork additions and subtractions that do not have its own line in the IT-201. The LOSAP exemption is subtraction S-130. Since the State has created this new form, the federal tax form on which the LOSAP distribution is reported should not create any difficulty in taking this exemption."
http://www.penflexinc.com/c8/important-tax-information-c41.html
After running review for NYS tax return I get a response Stmt 225 NYS subs Code S-130 should not be entered for an IT201 filer. How do I solve this problem?
Worked for me for 2018 but keep getting error on review for 2019 filing.
I receive LOSAP (it is already in your questions but the answers don't really explain how to fix it on the fed. It is NOT self employment income but income for the longevity of service award (program - thus losap). When I entered it in 2020 I must have done something so that it doesn't show in the self employment tax but lower in the pension lines. Now when I enter it into a 1099 - I get all sorts of questions regarding self employment and such - none of which are applicable and I certainly don't want to pay self employment tax on it. How do I enter it or do I just enter is as a 1099R?
No. Do not enter it as a 1099-R. If bonuses or awards are reported on a 1099-MISC in Box 3, then you will still need to pay the uncollected Social Security and Medicare tax, as well as the income tax. This could be why it is populating under your Schedule C and adding self-employment tax (which will end up being your portion of the Social Security and Medicare on this income).
The IRS classifies bonuses as supplemental wages, along with severance pay, taxable fringe benefits, vacation pay, back pay, and overtime. Supplemental pay is anything other than your regular pay.
Typically, bonuses and awards are added to a W-2. However, there are different withholding methods for supplemental wages that the employer can consider, which are discussed in IRS Publication 15.
Per the IRS, regardless of the method employers use to withhold income tax on supplemental wages, supplemental wages are subject to Social Security and Medicare taxes.
This still doesn't quite answer the question.
Bottom line is that the 1099-Misc in question is a pension, authorized by the State of New York and and each local municipality where a Volunteer Fire Department is located, but is funded by the individual fire district or company for Volunteer Firefighters that is not taxable by the State of New York. The pension amount is determined by the length of service credited to the individual Firefighter, hence the label "Length of Service Awards Program."
I do collect a pension from the NYSLRS which is also exempt from NYS taxes but is federally taxable. However the NYS pension is not subject to Social Security taxes and I hope that the LOSAP pension is not subject to Social Security taxes either.
Intuit would truly provide a great service to their customers if they would investigate this with the IRS so that we can get a true answer to our inquiries instead of having the multitude of TurboTax customers having to individually contact the IRS and get a different answer from each rep they get in contact with.
PLEASE IMPROVE THE ANSWERS ON THIS SUBJECT.
Enter the amount received as Hobby Income. It will not be subject to self employment tax.
Sorry, but the "EXPERTS" giving advice here need to get on the same page. One says the LOSAP payments are not to be considered as self employment income and should not be subject to Social Security taxes, but you say otherwise.
Which is it?
" AmyC
You will need to subtract it out from NY. See I receive a 1099 Misc for my volunteer firefighter LOSAP."
Please help. I am trying to fix this (2021 taxes) per the instructions but after selecting continue in step 11 the net screen asks "Did you receive a Form 1099-K?"
Steps 12-23 cannot be followed.
How do we fix this now?
TIA
NCFM80
Hi Dave,
The form giving me a hard time is 1099-MISC issued for Length of Service Award Program (LOSAP) payments for serving as a volunteer firefighter in the State of New York.
The payments are not taxable by the State of New York and are not be subject to Social Security or Medicare taxes and should not be treated as self employment/sole proprietor business income.
In the "Picture of Your 2021 Income" in TTax Premier 2021 it lists the payments as "Sole Proprietor Business" which is incorrect. With this mis-categorization it seems TTax is adding self employment taxes (Fed, SSA, Medicare, and State Taxes).
I did get another reply from one of the "Tax Experts" that tells me to simply indicate the payments received are "Hobby Income" thereby not being subject to business taxes.
I had the same problem last year but don't recall how it was resolved. Is there a way to find that out in 2020's tax return file?
Thanks for whatever help/guidance you can provide.
NCFM80
To properly post this 1099-MISC use these steps.
You are not self-employed, but TurboTax thinks you are because of the way you entered it on your return.
If you do not follow this posting procedure it will result in self-employment. You would also have to pay 15.3% in self-employment tax (Social Security & Medicare).
John,
Which do you recommend:
1. Delete the 1099-MISC and add it again?
or
2. Go to form and make changes on the form?
Thanks.
NCFM80
The safest and most accurate way to do it is to delete the 1099-misc and re-enter it from scratch. There are too many places the income can get moved to a different schedule and you take a 50/50 chance of correcting it using the ''edit'' method. @NCFM80
Amy is on the right track. I just went through this on the phone with a Turbotax Expert because I had the same issues with Federal wanting to charge me SE tax, and where to deduct it from Federal income on my NYS return as it is a non-taxable pension in NY. The following is based on my notes from the call. I hope this helps.
On the Federal return, you should only select the current tax year where it asks "How often do you get it?" The LOSAP Defined Contribution plan I was in was closed down by our Village and we received our final distribution over 2 years - 2021 and 2022. When I checked off both years, Turbotax wanted to charge me SE tax. By only checking off 2022, it drops the SE tax, as it is supposed to be. If you check off multiple years, the Turbotax software thinks it is recurring earned income. Checking only one year “tricks” the software to realize it is not SE Tax eligible. I still have to pay Federal income taxes on it, but that is all.
To subtract it from your Federal Income on the NYS return in Turbotax, go to
Select Changes to Federal Income
Select Other NY Adjustments to Federal Income
Select Other Changes (Adjustments) to your Federal Income
The next screen is "Enter Other Additions", select continue
Next Screen is "Enter any other Subtractions"
Choose the line: Volunteer Firefighter or Ambulance Worker Length of Service Award, and enter the amount from the Form 1099-Misc Box 3
Hit Continue
This will subtract it from your Taxable income on the NY State Return
I hope this helped my fellow volunteer firefighters.
I have the same problem, Can't find a way to get an answer. Just Like You!
TT-Deluxe will not let me e-file with that S-130 "error" and yet the instructions on the help site say we are correct.
Good Luck!
@steve208 I would like to take a deeper look at this. However, I need a diagnostic file which is a copy of your tax return that has all of your personal information removed. You can send one to us by following the directions below:
TurboTax Online:
Sign into your online account.
Locate the Tax Tools on the left-hand side of the screen.
A drop-down will appear. Select Tools
On the pop-up screen, click on “Share my file with agent.”
This will generate a message that a diagnostic file gets sanitized and transmitted to us.
Please provide the Token Number that was generated in the response.
TurboTax Desktop/Download Versions:
Open your return.
Click the Online tab in the black bar across the top of TurboTax and select “Send Tax File to Agent”
This will generate a message that a diagnostic copy will be created. Click on OK and the tax file will be sanitized and transmitted to us.
Please provide the Token Number that was generated in the response.
You'll need NYS-IT-255 for Additions and Subtractions. Use the S-130 code under subtractions. That will back the number out that you entered with your Federal information. I had a problem in that I opened the box on the worksheet in the left column, popped open the detail and entered the information. There are two columns to the right, make sure your amount only appears in the right column. Tech Support, when I finally reached them, were very helpful in getting to the bottom of this issue.
Also:
AmyC: After my frustration searching on-line for an answer, I spent another 20 minutes dodging around all the push 17 to request dinner, etc. Finally got a LIVE PERSON, I shared my return and we went through it step-by-step without finding anything we could do. She then bumped it up a level and I was connected with "Ravin" and we did some searching and she involved others. We finally were able to clear the error by deleting the first box next to S-130, which left the same amount in the right column and then it cleared! SO, thanks for reaching out, I'm good. Let me know if further info from me would help others. Steve208 Rochester, NY
DID ALL THAT BUT TURBO TAX SHOWS ERRORS DURING REVIEW BECAUSE SCDUAL C NOT COMPLETED. DO I IGNORE SCHEDUAL C AND FILE ?
No, you don't ignore the error message about Schedule C. To clarify your question, what income is reported on this 1099-MISC that you are reporting?
I received my payout in NJ last last year however I received a w-2 instead of a 1099. When I enter mine in it gives me an error saying my non qualified plans number doesn't add up. How do I fix this as I am getting penalized over $2000 in my taxes.