topic Re: 1099 NEC state in State tax filing

1099 NEC state

denjill — Tue, 27 Apr 2021 01:24:57 GMT

I am new to side business. i received a 1099 NEC this year. I added it to my federal taxes. Do I have to include it in Misc Compensation for Pennsylvania State Taxes? TT asks: "if your other nonemployee compensation is NOT TAXABLE as PA income, check box. How do i know if my 1099 NEC is taxable and should be entered?

Re: 1099 NEC state

Bsch4477 — Tue, 27 Apr 2021 03:36:48 GMT

From PA tax site:

Nonemployee compensation on a 1099 refers to money paid to you as an independent contractor rather than as an employee. You will still need to pay taxes on this money and report it as self-employment income on your tax return.

Re: 1099 NEC state

Hal_Al — Wed, 28 Apr 2021 12:06:29 GMT

Simple answer: it's taxable unless you know some reason it isn't. "Side business" is taxable.

See:

https://www.revenue.pa.gov/FormsandPublications/PAPersonalIncomeTaxGuide/Pages/Gross-Compensation.aspx

Re: 1099 NEC state

denjill — Wed, 28 Apr 2021 11:54:39 GMT

I was confused as one would think that TT would transfer the NEC1099 income as well as the W2 income when moving over to state taxes?

Re: 1099 NEC state

Hal_Al — Wed, 28 Apr 2021 12:44:23 GMT

Yes, TT automatically carries the NEC1099 income, as well as the W2 , to the state return.

Checking the box will allow you to "back it out" "if your other nonemployee compensation is not taxable as PA income (pretty rare).

See https://www.revenue.pa.gov/FormsandPublications/PAPersonalIncomeTaxGuide/Pages/Gross-Compensation.as...

Re: 1099 NEC state

denjill — Sat, 01 May 2021 11:54:52 GMT

TT did not bring my 1099 NEC over to State.

I am trying to enter the info in under Misc comp.

1) I live and do my work in PA, but my 1099NEC is from NC. I believe I should enter this info in Misc Comp on my state taxes, correct?

2) there are 3 boxes: Federal amount, PA amount, PA withholding. My NEC only has info in box #1 Non employee compenstation. Which of these 3 boxes does this amount go in?

Re: 1099 NEC state

denjill — Sat, 01 May 2021 11:56:38 GMT

thank you

Since TT did not pull my 1099 NEC over to state, under Misc Comp there are 3 boxes:

Federal Amount

PA amount

PA withholding

My 1099NEC only has info in box #1 Nonemployee compensation. Which box should I enter this in to? Federal? or PA amount? Both?

thank you

Re: 1099 NEC state

Hal_Al — Sat, 01 May 2021 12:17:26 GMT

You may be just looking in the wrong place. Where on the federal return the 1099-NEC income went determines where TT will put it on the PA return.

On the federal return, it should have been reported on schedule C, then line 3 of Schedule 1, then line 8 of form 1040. That will have TT out it on line 4 pf PA form PA-40.

If it went on line 8 of Schedule 1, on the federal return, you are correct, it should be entered as misc comp on the state return. From the instructions for form PA-40:

Generally, other or miscellaneous income is either compensation
on Line 1a, (see Page 10), or business income on Line 4, (see
Page 17). If you cannot determine the income class, contact the
department for assistance.

https://www.revenue.pa.gov/FormsandPublications/FormsforIndividuals/PIT/Documents/2020/2020_pa-40in.pdf