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Dubo
Level 1

Need Help! - 1099 Misc for Medical Insurance Premium Paid as Retirement Benefit

Hi -- I am retired and my employer paid part of my medical insurance premium for me in retirement as a benefit until I turned 65.  This year they issued a 1099 Misc with the amount of the premium paid they paid on my behalf under "Box 6 Medical and Health Care Payments".  When I put the 1099 into Turbo Tax, it generates a schedule C and asks me questions about my business (which I don't have) and drastically increases my tax liability because it imposes a self-employment tax on "my business".  Can anyone help me figure out how to input this information in a correct format into Turbo Tax so that my tax liability is accurate and does not have me submitting a Schedule C?  I've tried calling my previous employer, but so far I have not been able to get an answer from them about the form or even if the form is filled out correctly.   Any help from anyone will be greatly appreciated!  J Dubo

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2 Replies
MinhT1
Expert Alumni

Need Help! - 1099 Misc for Medical Insurance Premium Paid as Retirement Benefit

If you receive a form 1099-MISC for a medical insurance premium, then you aren't considered ‌self-employed and don't need to file a Schedule C.

 

In TurboTax Online, enter your form 1099-MISC by following these steps:

 

  1. Open your tax return
  2. Click Federal in the left-hand column then on Wages & Income
  3. Locate the section Other Common Income and click on the down arrow on the right
  4. Click Start next to Form 1099-MISC
  5. Follow the interview until you arrive at the page titled Did this involve an intent to earn money?. Answer that this didn't involve an intent to earn money. The amount will be reported as Miscellaneous income and won't be subject to Self-employment tax.

 

In TurboTax, there's a work-around. Although you may receive this income every year, say that you only receive the 1099-MISC ‌in 2023, not in previous years, and not in 2024, you will then have the screen where you can say that it didn't involve an intent to earn money.

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Dubo
Level 1

Need Help! - 1099 Misc for Medical Insurance Premium Paid as Retirement Benefit

Thank you for your help and suggestion for how to handle this.  We finally heard back from my old employer after weeks of dealing with this, and they finally said they made a mistake putting the amount under Box 6 on the 1099 and are going to reissue the 1099 with the amount under Box 3 as other income. Not sure why they didn't tell folks affected by this error that there was an error, but...  going now to redo my tax return and see where the dust settles.   

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