Pre-tax accident indemnity plan payout

cam1968nc — Wed, 25 Feb 2026 18:57:02 GMT

I received a payout from a pre-tax accident indemnity plan. I understand that the amount paid that exceeded the cost of the services (doctor visit) is taxable. I received a 1099-MISC for the full amount. Where do I show the amount that is not taxable?

Re: Pre-tax accident indemnity plan payout

RogerD1 — Wed, 25 Feb 2026 19:39:03 GMT

Is the 1099-MISC showing the income received in Box 3 Other Income? It should show this, rather than Box 6 - Medical Payments because box 6 is payments you received for providing medical services. If your 1099-MISC shows an income entry in any box other than Box 3, you should request the provider of the 1099-MISC correct it.

If your 1099-MISC is correct as is, the 1099-MISC would get entered in the "Other Common Income" in TurboTax under "Income from Form 1099-MISC". Once you enter the 1099-MISC info, you'll be able to describe the reason why you got the 1099-MISC - you could use "Indemnity payout" or similar wording.

The next screen will ask about uncommon situations - none will apply.

The next screen asks if the payout involved work like your main job - that will be answered No.

The next screen will ask how often you got income from that payout - if in 2023, 2024, 2025, or expected in 2026.

The next screen about intent to earn money would be answered No.

Once the 1099-MISC entry is finished, proceed down to the Less Common Income area, and click on Start for Miscellaneous Income, 1099-A, 1099-C. Scroll down to the bottom and click Start on Other reportable income. You can enter a description of Medical expense offset on 1099-MISC and then enter a negative amount equal to the medical expenses that you had against the 1099-MISC income.

Both of the entries will show up on Schedule 1, to the left of line 8z with your 1099-MISC amount and the offset amount right below that - the net difference amount will be reported correctly on line 8z.

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Pre-tax accident indemnity plan payout

Re: Pre-tax accident indemnity plan payout