topic "Describe the reason for this 1099-NEC" Won't accept my typed response. How to fix this? in Retirement tax questions

"Describe the reason for this 1099-NEC" Won't accept my typed response. How to fix this?

dennisgrove — Sat, 06 Mar 2021 16:43:40 GMT

Re: "Describe the reason for this 1099-NEC" Won't accept my typed response. How to fix this?

ColeenD3 — Sat, 06 Mar 2021 18:10:07 GMT

Where are you entering this. If you chose Schedule C and entered in the spot indicated in the screenshot, there should be no reason to get this question.

Re: "Describe the reason for this 1099-NEC" Won't accept my typed response. How to fix this?

dennisgrove — Mon, 08 Mar 2021 22:08:57 GMT

Hi ColeenD3, Thanks for your response. I'm entering it in "Other Common Income" as that specifically listed 1099-NEC (the form we received) as one of the options. The income is from a court settlement, but it is not back pay.

Dennis

Re: "Describe the reason for this 1099-NEC" Won't accept my typed response. How to fix this?

LenaH — Tue, 09 Mar 2021 01:50:21 GMT

If you received a lawsuit settlement on a 1099-MISC, it should not be entered on a Schedule C. This income should flow to Other Income on your return.

Please follow the instructions below:

Open or continue your return, if you're not already in it.
Search for 1099-misc and select the Jump-to link.
Edit your 1099-MISC.
Continue past the amounts already entered.
Describe the reason for this 1099-MISC as Lawsuit Settlement.
Answer This Money Was From a Lawsuit Settlement on the screen Does one of these uncommon situations apply?
Answer No, it was not back wages for the next question.
Answer No for the question Did you have another 1099-MISC?
Your 1099-MISC will flow to Other Income.

Next, please make sure to delete any Schedule C or associated self-employment forms in your return.

Search for Schedule C with the magnifying glass tool on the top of the page.
Select the Jump to Schedule C link in the search results.
Select No to the question Did you have any self-employment income or expenses?
Click on Tools.
Click on Delete a Form.
Scroll down to your forms and look for Schedule C and other self-employment forms created and click Delete.

@dennisgrove

Re: "Describe the reason for this 1099-NEC" Won't accept my typed response. How to fix this?

dennisgrove — Tue, 09 Mar 2021 13:14:11 GMT

Hi LenaH. Thanks for your response. I'm entering it in "Other Common Income" as that specifically listed 1099-NEC (the form we received) as one of the options. The income is from a court settlement, but it is not back pay.

Dennis

Re: "Describe the reason for this 1099-NEC" Won't accept my typed response. How to fix this?

DMarkM1 — Tue, 09 Mar 2021 17:01:22 GMT

The nature of the new Form 1099NEC says that is "Self-employed" income. It should have been issued on a 1099-Misc. However, you can enter this as "Other reportable income" and indicate the form 1099NEC you received so the IRS can reconcile it.

First delete the entry from the "Other Common Income" topic and/or self-employment topic to clear it.

Then,

Click 'Wages & Income" tab
Scroll down to "Less common income"
"Show More"
"Start/Revisit" Miscellaneous Income
"Start/Revisit" Other Reportable Income
"Yes"
Enter description 1099-NEC Court Settlement
Enter amount