topic Should I have to pay taxes on a 1099-NEC that has "non employee compensation" from a student loan credit disbursement and Cares Act distribution? in Retirement tax questions

Should I have to pay taxes on a 1099-NEC that has "non employee compensation" from a student loan credit disbursement and Cares Act distribution?

jrconradson — Mon, 22 Mar 2021 02:58:01 GMT

Re: Should I have to pay taxes on a 1099-NEC that has "non employee compensation" from a student ...

JohnB5677 — Mon, 22 Mar 2021 14:36:21 GMT

When a student loan is forgiven, you don’t have to pay the debt back. However, in most cases, the forgiven balance could then be considered money you received as a benefit, making it taxable income.

To avoid also be subject to self-employment tax, I suggest you post it using these guidelines.

Wages & Income
1099 MISC and Other Common Income
Select Income from a 1099-NEC
Enter payer's name
EIN Number
Amount you received
State what it was for
Click None of these apply
No you do not have expenses to enter

Re: Should I have to pay taxes on a 1099-NEC that has "non employee compensation" from a student ...

IveBeenDupedByTurb0t4x — Sun, 02 Feb 2025 03:41:00 GMT

None of these apply is no longer an option. We received additional forgiveness from the TX Higher Education Fund for teaching a low-income school for 5+ years. They classified this as a 1099-NEC. We are not self-employed.

Re: Should I have to pay taxes on a 1099-NEC that has "non employee compensation" from a student ...

AmyC — Wed, 05 Feb 2025 00:15:26 GMT

The new rules have your student loan forgiven with no tax implications through 2025. You will need to report it, since you received the form and then subtract the income back out. The program and worksheets are just that, we need your actual tax return to be correct. Follow these steps:

Step 1:

Report the NEC

Open your return to the federal income section
Enter the 1099-NEC into the program
describe the reason, continue
Uncommon situations, select from sporadic activity or hobby to get this reported correctly on the tax forms, continue

Step 2:

Subtract the income from your return

scroll down to Less Common Income
select Miscellaneous Income, 1099-A, 109-C, start
select Other reportable income
Other taxable income, select Yes
Enter description, student loan forgiveness
Enter amount as negative , use the minus sign in front of the dollar value
continue

See Topic 431 @IveBeenDupedByTurb0t4x