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

[Irene2805]

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

[Laurennk22]

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

[Laurennk22]

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

[LinaJ2020]

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

[soup318]

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"?

[jadeann182]

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?

[JamesG1]

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]

[BarryGraham]

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.

[LeonardS]

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

[BarryGraham]

Yes, that's what I said.  Thank you.

[jep85742]

My wife participated in a Covid Vaccine trial. The study paid her $895. They sent a 1099-MISC with the $895 reported in box 6. If I enter box 6 in Turbo Tax, it forces me to create a self-employed form C. That does not seem to be appropriate. If I place the entry in box 3 then I don't have to create a from C and can properly select "was in a research study and this was the payment".  I'm afraid that if I put the entry in box 3 then the IRS will 'kick it back' because it does not match the 1099-MISC submitted by the trial organization.  I read the IRS instructions and it is clear the trial organization is reporting it in the wrong box.  The trial organization is being less than helpful bout supplying a corrected 1099-MISC. What should I do?

[JulieS]

Yes, you can enter the amount in box 3 of Form 1099-MISC. That is where it should have been in the first place.

While being a test subject is medical in nature, your wife is not a healthcare provider. 

Just make sure to keep your documentation in case the IRS contacts you about it in the future. I think the odds of that are low, but they are not zero, so you should be prepared. 

[jep85742]

If I move the amount from one box to another, do you really believe the IRS computers won't flag it?

[KrisD15]

Another option is to enter the 1099-MISC as "Other Income". 

The income will be listed on Schedule 1, and carried to your 1040.

It will be taxable, but will not generate Self-Employment Tax. 

You can list it as a "1099-MISC" so the IRS will recognize it as being reported. 

Go to the Wages & Income section

Scroll down to the VERY LAST option "Less Common Income" and click Show more

On this new drop-down list scroll down to the VERY LAST option "Miscellaneous Income" and click START

Now scroll down to the VERY LAST option "Other reportable income" and click Start

Select YES on the "Any Other Taxable Income?" screen 

Type "1099-MISC medical study payment" (or whatever you think will be understood) and the amount.

[jep85742]

That's not very reassuring because right there on that screen turbotax states "Do NOT enter income reported on Form 1099-MISC".  Then the IRS will have a 1099-MISC that I have not reported! That definitely will set a flag for not reporting that 1099-MISC.  I guess I will have to storm the office that provided the incorrect 1099-MISC and insist that they enter send a corrected 1099-MISC. Wouldn't that be the best defense?