Income question: Does income from a medical study have to be reported? If so how?

what is considered infrequent?

Income for participating in a clinical trial or medical study is taxable.  If the activity is infrequent, the income would not be self-employment income.  The IRS discussed that position in the Internal Revenue Service's Private Letter Ruling 9106004 regarding a participant in a medical study for asthma.

What that means is that it would be subject to income taxes, but not subject to self-employment tax.  It also would not qualify the participant for the earned income tax credit or any other tax benefit that is dependent on earned income such as an IRA deduction.

If you did receive a Form 1099-MISC , it is entered under the Wages and Income tab

• Check for More Income and See All Income
• Click on Show More then  Start beside Other Common Income by the icon of the green money bag
• Click onStart by Form 1099-MISC.
•  Enter Form 1099-MISC information.  Make sure you enter the amount in Block 3
•  under source of other income, select "other income"
•  "none of the above, show me other options"
• [You] were in a research study and this was payment,
• you did not perform a service to earn the money.

 If you did not receive a Form 1099-MISC, you will still enter it under Wages and Income but

• Scroll down to Less Common Income, by the gold dollar sign icon
• Click on See More and Start beside Miscellaneous Income
• Scroll down and click on Other Reportable Income
• Enter the amount and a description there.

what is considered infrequent? if it is my only source of income and i participated every other month like im able to, would it then be self employment?

I am also interested in the answer to this question. Additionally, if the income was received to a foreign bank account in a foreign currency, is it also exempt from taxes or included in my overall foreign income?

I did a medical study n was wondering which form do I need to file taxes?

You may or may not have received a 1099-MISC form.  See TeresaM's answer at the top of the post.  She gives instructions to enter it if you did OR did not receive the 1099-MISC.  

So I got a 1099 form, but it has all payments including compensation for travel which I thought was tax exempt. Do I put down the number I was given or asked the company to correct it.

If your Form 1099-MISC has the income in Box 7 and you report it as self-employment, then you can deduct the travel expenses on your Schedule C.    

If you reported the income as Other Income (not self-employment using the directions above), you can't subtract the travel reimbursement as it is taxable income paid to you and non-deductible on your personal tax return.   There is no 'corrected' form to request in that situation. 

@greencode96   

I followed the steps above however I it keeps asking me for an EIN. I am not self employed, I was in a clinical trial and Turbo Tax will not let me file my taxes as it keeps saying I have to enter a Sch. C form since I have a 1099. 

My taxes were just rejected- please help!

@smickschl55 

What is the exact error message or code ?

Thank you.

Turbo tax should allow you to file a Schedule C without an EIN.

But if you need an EIN, you can get one free on the IRS.gov website. Just look up EIN.

;Apparently the EIN is still required.  It's a problem because the Schedule C requires it to be handled like you're self-employed, leading to a whole host of errors and issues.  I'm not real interested in getting an EIN as this is my employment by any stretch of the imagination.  Leaning towards just reporting it as miscellaneous income. 

You do not need an EIN if you enter the income in TurboTax as "Other Common Income," which is reported on line 8 of 1040 Schedule 1 and will not generate Schedule C or SE tax.  Please use the following steps:

1. Click on Federal > Wages & Income.
2. Scroll down to the Other Common Income section. 
3. Click on the Start/Revisit box next Form 1099-MISC. 
4. On the screen Did you get a 1099-MISC?  click on the Yes button.
5. On the next screen, Let's get the info from your 1099-MISC, enter the information from the 1099-MISC.
    
6. On the following screens, answer the following questions:
   • Did it involve work that's like your main job? No.
   • You got it in 2020
   • No, it didn't involve an intent to earn money

 7.  Continue through the rest of the interview screens. The income will appear as Other Income.

@lwiant

What if this is the same situation but I received a 1099-NEC?? Please help, not sure what to do. Thanks.

What if this is the same situation but I received a 1099-NEC?? Please help, not sure what to do. Thanks @Irene2805 

You will still enter your info under "Other Income".  Here are the steps:

In TurboTax online,

• Sign into your account, select Pick up where you left off
• To the right upper corner, in the search box, type in "other reportable income" and Enter
• Select Jump to other reportable income
• Next screen, Other Wages Received, select No to continue
• Next screen, scroll down all the way to the bottom, under Other reportable income, select Start
• Next screen, Any Other Taxable Income? select Yes to continue
• Follow prompts.

This amount will show on line 8 of Schedule 1 and Form 1040.  Although it's reported on a 1099-NEC, as long as it is reported under Other Income, it is in compliance with the IRS' rules. 

@Laurennk22

So if I participate in a clinical research study say once a month and they pay me 2000 dollars for time and travel, would that affect my unemployment benefits and is it considered "earned income"?

I know it is taxable. But how do i report a 1009-nec if not self employed or business owner. I only participated in one study and now they want self employment tax through any of these tax sites?

Follow these directions to post  income, taxable but not subject to self-employment taxes.

• Down the left side of the screen, click Federal.
• In the center of the screen, click Wages & income.
• On the screen Your income, scroll all the way down to the last section, Less Common Income.
• Click the Start or Update button for the last topic, Miscellaneous Income, 1099-A, 1099-C.
• On the next screen, Let's Work on Any Miscellaneous Income, scroll down and click the Start or Update button for the last topic, Other reportable income.
• The next screen asks, Did you receive any other taxable income. Click Yes.
• On the next screen, Other Taxable Income, enter a description and the amount. Click Continue.
• On the next screen click Done.

The income will be reported on Schedule 1 line 8 with the description that you entered.

IRS may presume that 1099-NEC income is self-employment income.  Maintain documentation of the nature of the income in your tax return file.

@jadeann182 

[Edited 01/31/2022 5:00 PST]

If you follow the steps above (see below where I cut and pasted them) then it won't ask you for an EIN

If you did not receive a Form 1099-MISC, you will still enter it under Wages and Income but

• Scroll down to Less Common Income, by the gold dollar sign icon
• Click on See More and Start beside Miscellaneous Income
• Scroll down and click on Other Reportable Income
• Enter the amount and a description there.

Follow these steps to enter your income from participating in a clinical trial that is taxable but not subject to self-employment taxes.

1. Log into your TurboTax account if it is not open.
2. Click on the Wages & income tab.
3. On the screen, Your income, scroll down to Less Common Income.
4. Click the Start or Update button on the line  Miscellaneous Income, 1099-A, 1099-C.
5. On the screen, Let's Work on Any Miscellaneous Income, scroll down to Other reportable income and click Start or Update 
6. On the page, Did you receive any other taxable income? Click Yes.
7. On the next page, Other Taxable Income, enter a description and the amount. Click Continue.
8. On the next screen click Done.

The income will be reported on Schedule 1 line 8 with the description that you entered.

@BarryGraham

Yes, that's what I said.  Thank you.