No tax on tips for 1099-nec

[bhilton174]

I earned income for instacart and qualify for "No Tax on Tips". When I entered the info for my 1099-nec it never offered an option to list tips, the 1099 only had the income box filled.  I entered this info two weeks ago. Today I got an email form instacart stating what my tips were for 2025.I have used the search, called turbo tax support, checked chat gpt which said others have had this issue. Is the software not up to date? If not when will it be or what will turbo tax do to allow the tips to be entered?

[ThomasM125]

The "No tax on Tips" update you mention for income reported on a Form 1099-NEC is active currently in both the desktop and online versions of TurboTax. I just tested this and had no trouble entering in tip income not reported on a Form 1099-NEC. I suggest you try again and if it doesn't work, delete the Form 1099-NEC you entered and re-enter it. You should see the Tip income questions after you enter in your Form 1099-NEC.

1. Choose the Tax Tools option on your left menu bar while working on your return

2. Choose Tools

3. Choose the Delete a form option under Other Helpful links 

4. Find the Form 1099-NEC in the list and delete it

[bhilton174]

OK thank you and I will try. Is it possible I did not receive the. option because of when I initially entered it. Is it possible the software (web based version) did not yet have this option?

[ThomasM125]

It is possible since the option was not available when you entered the asset originally it won't work on that entry, so that is why it may be necessary to delete the entry and re-enter it.

[bhilton174]

I deleted the entry and attempted to reload the information for the 1099-NEC. Again I was not prompted to add my tips. So deleting and resubmitting the information did not correct the problem of turbo tax not allowing for tips for the 1099-NEC. Please advise

[CatinaT1]

Sounds like even though you deleted the NEC and re-entered it, your browser is still using the pre-updated versions. Most TurboTax errors happen because the browser is trying to use an old "session" from a previous visit.      

• Log Out Completely: Before doing anything else, click Sign Out in the TurboTax menu.
• Clear Cache and Cookies: This removes old, "corrupted" data that might be confusing the website.
• Use an Incognito (Private) Window: This is the most effective "quick fix" because it launches the browser without any saved history or extensions (like AdBlockers) that often interfere with tax forms.
• Restart the Browser: Close all open windows of your browser entirely and then reopen it.

By clearing the cache or using Incognito mode, you force the browser to establish a brand-new, secure connection with the Intuit servers.    

[bhilton174]

I tried all these suggestions as well as used another device and it still did not work. 

[Vanessa A]

Do you overall qualify for No Tax On Tips?   Is your income too high?   Did you claim tips with W-2 income at all? Which platform are you using?

In order to claim tips, the following must apply:

• The tips MUST be reported.  If they are not reported on a form to the IRS you cannot claim them for the no tax on tips deduction.
  • If employed they need to be reported on your W-2 or form 4137
  • If self-employed, they must be reported on a 1099.  If you received them as cash, they are not deductible. 
• Your income must be below $150,000 if you are single or less than $300,000 if Married Filing Jointly.  Above these amounts, the deduction starts to fade out and is not available at all for those with income over $400,000 for single and $550,000 for Married Filing Jointly.
• You can not claim this deduction if you are Married Filing Separately
• You receive tips from an occupation that normally and customarily receives tips
• Self-employed, deduction may not exceed individual’s net income, without regard to this deduction, from the trade or business in which the tips were earned.
   

If you do qualify, you may be able to enter the 1099-NEC over again as an "extra".  After you add the extra, you should be given the option to enter the tips.  Do this before you delete the old one.  Then once you enter the new one, you should see the tips.  Then go back and delete the old one.