If this 1099-NEC is a severance package or back wages of some kind, you are correct. When entering the 1099-NEC you will come to the question:
- Does one of these uncommon situations apply?
- "Your" employer reported this extra money on a 1099-NEC, but it should have been reported on a W-2.
You will be subject to self-employment taxes.
The self-employment tax rate is 15.3%. That rate is the sum of 12.4% for Social Security and 2.9% for Medicare.